Blockchain in Property Registration (Distributed Ledger Technology)

India has registered a rapid economic growth in the past couple of years, while also witnessing a shift in the country’s economic profile – government initiatives like Make in India and Digital India etc. are cementing India’s position from being a low-value manufacturer to a provider of high-value services in the global arena. While economic activities remain buoyant, the government needs to capitalize on the economic momentum and accelerate its reform agendas. One of the key areas that requires regulatory attention is the real estate market, after all, a fundamental prerequisite for sustained economic growth is the existence of a robust land/property rights system. Secure tenure leads to higher land market efficiency, provides a greater access to formal credit channels, incentivizes investment in physical/human capital, reduces macroeconomic volatility and also encourages an efficient and equitable distribution of economic opportunities. The Digital India Land Records Modernization Programme launched by the Government of India erstwhile National Land Records Modernization Programme aims to modernize the management of land records, minimizing disputes, foster transparency in the land record maintenance systems and eventually move towards guaranteed conclusive titles for the immovable properties. The problem with the initiative however, lies in the fact that the maintained records are used for fiscal purposes primarily, thus making land titles presumptive, undermining the legal validity of the transaction, leaving them open to be challenged in the court of law. Also, due to the lack of coordination between various nodal agencies, there is no standardized registration of information, leading to ambiguity in the nature of transference of rights and the boundaries of the land under transaction. With the DILMRP still being heavily reliant on government functionaries as a trusted third party for verification, the system is left vulnerable to inefficiency, corruption, and iniquity. This, in turn, leads to the need of Blockchain technology to address the ineptitudes in the current system and increase efficacy by using it to create a digital record of transactions and share it across a distributed network of computers, allowing access to safe ledger manipulation, without the need of a central authority, making way for a tamper-resistant, transparent platform for land administration systems. For the introduction and implementation of such a system in India certain prerequisites need to be met; the key enablers hence, are as follows:
  • Establishment of a Public Key Infrastructure (PKI) to provide a basis of cryptographic trust. Blockchains can hence, coalesce with each other and existing PKI amalgamations.
  • Leveraging a protocol like Uniform Economic Transfer Protocol (UTEP) that could link the buyer to the seller, property, payment, bank, smart contract and registry.
  • Securing digital certificates and cryptographic keys for encryption, signing, and authentication
  • Ensuring that the operating system should not be vulnerable to malware.
  • Creating near field communication for secure interaction between smartphones and user’s unique identification number.
For the establishment of a robust PKI in India, there needs to be a consolidation of the current institutional infrastructure that governs land registrations and titles, under a single department which would also manage cadastral surveys, thus, consolidating the three, would facilitate greater coordination and an increase in accountability. Though there exist a number of impediments to the implementation of a Blockchain land registry in the country, like extensive legislative and administrative overhaul, limited digital application due to lack of internet access/poor literacy rates/poverty etc. However, once we’re able to circumvent the infrastructural/institutional/regulatory barriers and install a new property regime; the blockchain land registry coupled with a robust titling legislation, may prove to be the best way of implementing a secure, efficient and transparent land records system in India.

Author: Ashish Raj, Sr. Vice President – Sales and Business Development

Ashish Raj heads the Sales and Business Development at TerraCIS and is responsible for defining sales strategies, new business initiatives, strengthening client relationships, and business partnerships. With expertise in IT Program Management, Sales, Consulting, Project and Account management, he has been instrumental in TerraCIS’s growth from the beginning and has delivered a remarkable year-on-year growth.

Post a Comment