Estimating economic value of regularizing land tenure to the urban poor: evidence from India

Abstract

Across the world, governments of developing countries have adopted land titling as a policy tool to address issues of urban poverty and informal urban settlements. There are extensive publications by researchers, explaining how giving property rights to slum dwellers results in increased labour participation, better credit access as well as improvement in their education and health. In India, many land titling and regularization programmes have been implemented since the 70’s; and new large scale programmes have been announced recently in Odisha and Delhi. In this paper, we attempt to provide the Indian government with an economic rationale for providing property rights to slum dwellers. Through our study of 619 slum households in Mumbai and Bangalore, we quantify the socio-economic benefits to the government (via increased taxes and reduced subsidies). The results of our cross-sectional studies show that giving property rights does not result in significantly improved outcomes for slum inhabitants with respect to income, expenditure, financial savings, education, house improvement and credit access. Therefore, there are no significant resultant economic benefits to the government in the form of additional taxes or reduced subsidies. Our findings question the efficacy of using property titling as a blunt instrument to address the issues facing the informal urban settlements; and suggest that further longitudinal study of other endogenous and exogenous factors is required to understand the long-term impacts.