World Bank

Workshop on

LAND ADMINISTRATION AND LAND POLICY IN INDIA

January 5th & 6th, 2006

New Delhi

Cost Recovery Policies, PPPs and Sustainability

of Land Records Management in India

Presented By
Mr. Neel Ratan, Executive Director
Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

Table of Contents

1. Introduction 3
2. Current Status of Land Records in India 3
2.1 Steep fall in collection of land revenue 3
2.2 No periodic updating of land records 3

3. Public Private Partnerships for Self Sustainability 5

3.1 Rationale for Public Private Partnership 5
3.2 Types of PPP models 5
3.3 Opportunities for PPP in land records management 7
3.4 Possible benefits of PPP in land records management 7
3.5 Issues to be addressed in implementing PPP models 8
3.6 Guidelines for successful PPP implementation 9

4. Existing PPP Models in Land Records Management in India 11

5. International Trends 16
6. Conclusion 20
7. Reference Material 20

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

1. Introduction

Land records management deals with the recording, processing and dissemination of information
about ownership, value and use of land and its associated resources. It includes the determination of
property rights and other attributes of the land that relate to its value and use, the survey and
description of these, their detailed documentation and the provision of relevant information in support
of land markets. The official land registers maintained by the government should ideally guarantee
ownership and other rights in land and support secure mechanisms for the transfer and financing of
real estate. As a basis for sustainable land management these land registers justify considerable
investment of human and financial resources in appropriate land administration systems. Establishing
and maintaining such systems is a major challenge for many a countries world-wide. This paper
reflects on the current status of land records administration in India, the issues & concerns in the
system and the suitability of Public Private Partnerships (PPP) in addressing the same.

2. Current Status of Land Records in India

2.1 Steep fall in collection of land revenue

In the ancient and medieval periods and for several decades after the establishment of British power
in India, land revenue was the most important source of government revenues. The assessment and
collection of land revenue was therefore one of the most important functions of government. In 1841,
land revenue constituted 60% of total British government revenue and during even shortly after
independence land revenue was an important source of income for the states such as Madhya
Pradesh (43 per cent), Rajasthan (40 per cent), Uttar Pradesh (40 per cent), Orissa (33 per cent) and
Bihar (30 per cent) of gross receipts of the state. However, over a period of time the contribution of
land revenue in the total income has declined primarily because of the trend of abolishing land
revenue on uneconomic holdings, frequent exemptions on account of floods and droughts, increased
land disputes, and the lack of political will to tax the agricultural and rural sector. Currently, it
constitutes less than 0.5% of gross receipts of many states. Apart from the decreasing share of land
revenue in the overall income, land revenue is not even sufficient to cover the operational expenses of
the respective departments involved in the land administration.

2.2 No periodic updating of land records

The practice of updating of land records at the village level by differently designated revenue officials
in different states has been badly neglected. Very few states have a well managed and efficient
administrative apparatus of periodical updating of the land records. In most states, village and field
maps, record of rights and land measurement records have become unserviceable/ obsolete. In
several States, the record of right is invariably out-of-date, on account of mutations not being carried

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

out in time. Typically, the rules require that as soon as inheritance, partition or transfers take place,
the names of the new owners should be entered in Mutation registers. But the names of the new
transferees are not being mutated regularly and timely. As a result, the work of the mutation has fallen
in arrears. This is primarily due to lack of supervision by the superiors, and low priority paid to this
task, unavailability of adequate number of resources to carry out the function etc. Lack of clear
accountability has also provided opportunities for unauthorized changes to land records, at times,
often resulting in litigations in courts. Litigation in India is expensive and time consuming.
Government employees who are required to maintain the land records upto date are also
overburdened with many other duties. Another critical factor is lack of training facilities to use modern
equipments. The revision survey by conventional means typically takes about ten to thirty years. But
even the same is not carried out for several decades in most of the states. Some of the states are
facing acute shortage of printed forms and maps simply because their printing presses have become
outdated and are not professionally managed.

Mostly land records departments operate as service organizations with a state mandate, offering
services almost free of cost. They are traditional in conducting their business and depend heavily on
secure Government funds. Modern concepts and the opportunities offered by Information Technology
for the management of their operations, improving the quality of service delivery and better utilization
of resources, etc. are not applied to their potential. These departments often have natural monopolies
over their information sources. Such control over information gives them considerable market power,
thus restricting trusted third party operations in the market. They lack experience/ motivation for
creation of services beyond their capacity. Consequently, such business barriers hamper the
possibilities for the economic exploitation of foundation data available in these organizations and in
particular the creation of value-added, diverse services by private companies. Cost recovery is not a
common practice in India and the same applies to Land records management too,

Besides the traditional users of land information, such as governmental departments and local
authorities, the private sector also provides important customer groups for land administration data,
including surveyors, engineers, banks, lawyers, notaries or economists. This begs the question as to
whether the private sector should also take a proactive role within the organizational set-up for
developing land administration systems in India. Because of the need for efficient and streamlined
institutional arrangements for land administration, the involvement of the private sector in these
arrangements is considered to be both important & desirable. In the recent past , particularly in the
previous five years, many new developments have taken place with respect to creation of Land
Records Management System in India. A few illustrative case studies reflect the current situation w.r.t
land records management in India.

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 Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

3. Public Private Partnerships for Self Sustainability

3.1 Rationale for Public Private Partnership

This section explains the rationale for PPP and presents the various models which have been used by
countries around the world.

Governments decide on private sector participation with the following objectives:

ƒ To continuously bring technical and managerial expertise required with technological

developments in the external environment

ƒ To improve economic efficiency in the sector in both operating performance and the use of
capital investment. A major impetus here is on improved service delivery to the citizens.

ƒ To bring in large scale investment in the sector

ƒ To ensure self sustainability of the various Government initiatives in the long run

While private sector participation will help in improving technical and managerial capacity, it will be
effective, only if the Government chooses the appropriate model for operating the PPP and also
supplements it with regulatory mechanisms.

3.2 Types of PPP models

The various PPP models for land records management could be classified based on the nature of
responsibility held by the Government and by the private sector. In some cases, the Government
maintains full responsibility of operations, maintenance of the necessary infrastructure and service,
while in other cases the Government creates a framework wherein the private sector takes the full
responsibility including investments. However, in practice, these arrangements are hybrid in nature.

Allocation of responsibilities amongst the public and private sectors for the various options is provided
in the following table:
Table -1

Option Asset Operations & Capital Commercial Contract Duration

Ownership Maintenance Investment Risk
Service Public Public & Public Public 1-2 years
Contract
Private

Management Public Private Public Public 3-5 years

Contract
Lease Public Private Public Shared 8-15 years

Concession Public Private Private Private 25-30 years

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 Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

BOT/BOO Private & Public Private Private Private 20-30 years

Divestiture Private or Private Private Private Indefinite (may be

Private & Public limited by license)

A brief description of each of the PPP models listed above is presented here.

a. Service Contract

Government contracts out only specific tasks in the form of a Service Contract that mostly involves
availing technical expertise from the private sector partner. The period of service contract can range
from less than 1 to 2 years. The responsibilities of coordinating the tasks lie with the Government
managers, as does the responsibility of investments.

b. Management Contract

The Government transfers the responsibility of operation and maintenance of its operations to the
private sector through a Management Contract. The private sector is not involved in any capital
expenditure, which remains the responsibility of the Government. Such contracts are given out for a
typical period of 3-5 years and are most effective in situations where the Government’s main objective
is to rapidly enhance its technical capacity and its efficiency in performing specific tasks, or to prepare
for a greater private involvement.

c. Lease

Under the Lease arrangement, the private firm takes on the responsibility of operating and
maintaining the assets of the Government for a lease payment. Leases are entered into for a typical
period of 8-15 years. Under a lease, the Government and the private operator work closely, wherein
the Government must raise the finances and coordinate its investment program with the operator's
operational and commercial program.

d. Concession agreements

In a concession agreement, the private operator is not only responsible for operating and managing
the Government’s assets, but also for bringing in investments. However, the right to ownership and
use of the assets still remains with the Government. After a specified time period of say 25-30 years,
the assets (including those created by the private operator) revert to the Government. They are
attractive when large investments are needed in any infrastructure sector.

e. Build Operate Transfer (BOT)

Under the BOT arrangement the private firm undertakes to build, operate, maintain and later on
transfer the asset to the Government. During the period of the contract, say for 20-30 years, the
Government will pay a fee to the private operator.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

f. Divestiture

Divestiture is an extended form of concession wherein the ownership of assets is also transferred to
the private operator. This involves a complete management buy-out or transfer of shares / assets. The
role of the Government is very limited and it takes up the task of regulation.

3.3 Opportunities for PPP in land records management

There are many areas where involvement of private players is possible in land records management
as explained below:
ƒ First registration process (i.e., titling process)
ƒ Mapping & survey processes at the time of creation of cadastre
ƒ Individual property valuation (transaction based) or mass property valuation (systematic
valuation of groups of similar properties by use of standardized procedures)
ƒ Recording of land use
ƒ Providing technical services to the land records departments on an ongoing basis in areas
such as establishing, operating and maintaining:
o Data centers
o Disaster recovery sites
o Hardware, networks and other infrastructure of offices
ƒ Providing services to customers at service centers of the departments where the private
operator would provide services on behalf of the department, but under the general
supervision of departmental staff
ƒ Providing survey services to the customers. Private surveyors can be authorized by the
departments to carry out the survey & submit the plan documents to the department for
approval. These surveyors can be supervised through rules, regulations & audits.
ƒ Providing title insurance
ƒ Marketing & sales of geospatial datasets (framework data, reference data, etc.)
ƒ Vocational training & capacity building

3.4 Possible benefits of PPP in land records management

The possible benefits of PPP modeling accruable to the area of land records management are
provided below:

a. Release of Capital - PPPs often allow the public sector to translate upfront capital expenditure into
a flow of ongoing service payments. This enables projects to proceed when the availability of public
capital is constrained (either by public spending caps or annual budgeting cycles), thus bringing
forward much needed investment.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

b. Faster implementation - The allocation of design and implementation responsibility to the private
sector, combined with payments linked to the availability of a service, provides significant incentives
for the private sector to deliver capital projects within shorter timeframes.
c. Reduced whole life costs - PPP projects which require operational and maintenance service
provisions provide the private sector with strong incentives to minimize costs over the whole life of a
project, something that is inherently difficult to achieve within the constraints of traditional public
sector budgeting.
d. Better risk allocation - A core principle of any PPP is the allocation of risk to the party best able to
manage it at the least cost. The aim is to optimize rather than maximize risk transfer, to ensure that
best value is achieved.
e. Better incentives to perform – The allocation of project risk should incentivize a private sector
contractor to improve its management and performance on any given project. Under most PPP
projects, full payment to the private sector contractor will only occur if the required service standards
are being met on an ongoing basis. Apart from this, PPP also provides more incentives to the private
partner for technological innovations, due to the threat of competition.
f. Improved quality of service - International experience suggests that the quality of service
achieved under a PPP is often better than that achieved by traditional procurement. This may reflect
the better integration of services with supporting assets, improved economies of scale, the
introduction of innovation in service delivery, or the performance incentives and penalties typically
included within a PPP contract.
g. Generation of additional revenues – The private sector may be able to generate additional
revenues from third parties, thereby reducing the cost of any public sector subvention required.
Additional revenue may be generated, for instance, through provision of value added services using
the GIS information.
h. Enhanced public management – By transferring responsibility for providing public services,
Government officials will act as regulators and will focus upon service planning and performance
monitoring instead of the management of the day to day delivery of public services. In addition, by
exposing public services to competition, PPPs enable the cost of public services to be benchmarked
against market standards to ensure that the very best value for money is being achieved.

3.5 Issues to be addressed in implementing PPP models

Certain issues remain to be addressed, even with the obvious benefits of the PPP model of
operations. Key issues and questions that need to be addressed in this area are provided here.

ƒ Business model: Which business model to adopt?

ƒ Cost recovery: Time period over which capital investments are to be recovered – pricing
issues
ƒ Interoperability: Interoperability between the Government & the private organizations and the
resultant issues related to people, processes & technology

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

ƒ Access to data: Need to maintain confidentiality of information

ƒ Standardization: Standardization to bring about uniformity in service delivery, when multiple
private players are involved
ƒ Public confidence: Public acceptance of the private players delivering the Government
services
ƒ Quality of services: What mechanism should be established to ensure service level
adherence & how rigid should it be?
ƒ Employee union issues: Most trade unions will be suspicious of any initiative that might
cause longstanding public sector jobs to be transferred to the private sector. What strategy to
be adopted in this respect to achieve end customer benefits?

3.6 Guidelines for successful PPP implementation

Before a Government embarks on the PPP way to manage its services, they should answer a few
basic questions on the applicability of the PPP modeling route to their current operations. The
following diagram depicts three such basic questions to be answered for a successful PPP
implementation:

Once the Government is ready to embrace PPP as a model to conduct its operations, the following
broad guidelines should be followed during the process of design & implementation of a PPP model:
a. Ensuring open market access and competition: PPPs should neither impact negatively on the
operation of open markets nor on the clear and transparent rules of these markets. This issue is
particularly relevant with respect to tendering and selection procedures for private partners. While
regard must be given to ensuring that private parties are able to realize financial returns by
guaranteeing sufficient opportunity to generate revenues, this must be matched with a concern to
avoid the creation of non competitive or closed markets.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

b. Protecting the public’s interest: Any Government’s objective in developing control mechanisms
is foremost to protect the public’s interest. This manifests itself in many forms and will impact on
project design, scope and implementation. An effective framework of norms, quality and performance
standards together with effective monitoring and management systems can ensure that the underlying
objectives for adopting PPP are met. A degree of assurance should be obtained at the tender,
evaluation and contracting stages. Creation of independent consumer groups and associations acting
as “watchdogs” should be encouraged.

c. Selection of the most suitable PPP type: A detailed review of the costs and benefits of private
sector involvement versus public alternatives must be undertaken to ensure that a PPP enhances the
public benefit. The degree of private involvement needs to be carefully matched to the objectives and
needs of the project and the public. Appropriateness, cost, the ability to effectively implement and
manage should be the paramount considerations in selecting a PPP structure.

d. Success and constraint factors: The characteristics of projects, partners and implementation
arrangements will create a series of constraints. The Government and the strategic private partner
should ensure that there is full mutual appreciation of the risks that accompany the business activities
within the partnership and that the financial arrangements are sufficiently robust to carry those risks.
These must be fully recognized and integrated. A PPP must be regarded as an active partnership
requiring a degree of flexibility from each side. However, the extent of flexibility must also be clearly
defined to ensure that project boundaries are clearly known.

e. Sharing of revenues: The Government and the private partner should make clear arrangements
about respective benefits and any sharing of revenues. The arrangement must take full account of the
rules and guidance provided for Government budgetary systems.

f. Future requirements: PPPs are a developing concept and in some cases have required
substantial reforms to the legal and financial systems to make their application possible. This requires
possible actions to define the role of the public sector, institutional capacity building at all levels
including the allocation of qualified and motivated staff to specialized PPP units, reduction of market
risk through user-oriented strategic approaches and development of private sector investment
facilitation mechanisms. Additionally the ‘paying public’ i.e., the consumer must also be integrated and
given the power to influence PPP design and operation. This ‘bottom up’ influence is crucial to the
sustainability of the PPP approach and will require coordination with NGOs, consumer associations
and the public.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

4. Existing PPP Models in Land Records Management in India

So far, the option of PPP in land records management has been tried by very few States in India.
Even the most successful project in land records computerization – Bhoomi Project – does not use
PPP at its full scale. The initiatives of several other States in the computerization of land records
through PPP mode are still either in the conceptualization stage or under implementation stage. The
following sections present three case studies, which focus on the role of private sector in
modernization of land records management in respective States & extent of its participation.

a. Bhoomi - Karnataka

i. About the project:

In 1991, the Government of India devised a program to computerize the land records across the
country. The objective was to make the system of records administration transparent and free from
manipulations as well as to increase the usefulness of data contained in these records. The State of
Karnataka, one of the larger States of India, also participated in this ambitious project. However, due
to various reasons, two of its initial attempts met with only limited success. Finally in its third attempt
in 2001-02, the state implemented a highly successful project, Bhoomi (‘Bhoomi’ means ‘Land’ in the
native Kannada language), to computerize land records in the entire State. Under the project, 20
million records of land ownership of 6.7 million farmers living in 27,000 villages in the State were
computerized. The new system has brought about a sea change in the way land records are
maintained and administered in the State. The system has not only simplified the process of record
keeping but has also provided many collateral benefits. The governance model is designed to make it
financially self-sustainable over the longer term.

ii. Extent of Private Participation:

Capex: The project was implemented at an estimated cost of INR 25 Crores, incurred over a period of
10 years. This includes the cost of data entry done in 1991 & 1995-96, since this data was also used
as the basis for the current system. Out of the total cost, the Government of India provided INR 18.38
Crores while the State Government provided the balance project cost. Out of the total project cost,
the initial data entry, updating & printing costs amounted to INR 793.08 lakhs (32.5% of Capex). Data
entry was outsourced to private agencies due to the high volume of the land records involved. The
agencies were required to set up a temporary data entry center at the district offices. The State
Government provided the physical space for their operations, while the private agencies setup the
infrastructure themselves. In order to obtain their commitment in terms of the quality of the data
entered, the cost of correction of errors during data entry was agreed to be borne by the agency.

Opex: Two hundred and three (203) Bhoomi centers at the Taluka level are being operated by the
Government as of date (Dec, 2005), and are fully owned by the Government. Since the Government

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

was unable to fund the project’s expansion to the hubli level (a level below the Taluka level and
consisting of a group of villages) and further down, the public-private partnership model has been
implemented in these areas. Private entrepreneurs set up & operate the Kiosk at hubli level with
access to the servers at the Taluka level (group of hublis). The Kiosks only issue RTCs (Right,
Tenancy & Crop) certificate printouts. They do not carryout any transaction services like mutations/
ownership transfers. All the costs associated with the kiosks (e.g., building rent, electricity, computer
hardware, stationery, consumables, salaries of staff, etc.) are borne by the private entrepreneur
himself. Presently there are 60 such kiosks run by the private entrepreneurs. The villagers pay the
third parties for obtaining the RTCs, under the supervision of the concerned Village Accountants. A
specified percentage of the fee received is remitted to the Government and the balance is retained by
the kiosk owner. Apart from the management of Kiosks at the hubli level, the whole facilities
management including the maintenance of the IT systems and the activity of updating of the crop
details, is outsourced to private sector.

During the year 2004-05, the approximate income & expenditure of Bhoomi Project were as follows:

Table 2: Statement of Income & Expenditure

Item Description Amount

(INR lakhs)

A. Income: 1900
Sale of Rights & Tenancy Certificates

B. Expenses

Facilities Management (Outsourced) 470

Crop Details Updation (Outsourced) 250

Other costs 280

Total expenses 1,000

Surplus 900

As can be seen in the above table, the contribution of outsourced activities in the total cost now
stands at 72%.

The Government is now planning to involve private entrepreneurs to set up kiosks in the remote
corners of the State. Bhoomi is a trendsetter for e-Governance projects in the State as well as other
parts of the country.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

b. Integrated Land Information System (ILIS) – Andhra Pradesh

i. About the project:

Of the most recent initiatives taken up by various state governments in India in the realm of land
records management, ILIS clearly stands apart as a revolutionary project with extremely challenging
goals. The purpose of ILIS is to establish and manage a comprehensive and sustainable Land
Information Management System, which serves as a record of conclusive Title of all land parcels. It
also envisages providing all property related services in an integrated, efficient and cost effective
manner. The project implementation involves mammoth exercise of complete resurvey, fool-proof
titling, legal changes and establishment of delivery channels to render property related services to
citizens under one roof. It also necessitates reorganization of functions & services of existing
Government bodies offering property related services (e.g., Registration Department, Revenue
Department, Local Bodies, Survey & Land Records Departments)

The detailed conceptual model of ILIS (including its organization structure, functions, services, internal
processes, delivery channels, capacity building requirements, IT systems, etc.) has already been
finalized. Aerial survey of the pilot district has also been started as of December 2005. The State
Government is now in the process of selecting a private partner (Implementation Agency) on a PPP
basis to design, develop, implement & maintain ILIS.

ii. Extent of Private Participation: The following are the roles and responsibilities of the
Implementation Agency that will be selected for the execution of the ILIS:
a. Creation of the Digital Survey Fabric and the Title database.
b. Digitization and migration of the existing records to ILIS database
c. Processing of Ortho-Photographs given by National Remote Sensing Agency (NRSA) to create
the village maps
d. Preparing the field re-survey estimate & conducting the field re-survey
e. Preparing the final cadastral maps
f. Assisting the Government during the title verification exercise
g. Design, development, testing and installation of a secure, scalable Application Software system
h. Procurement of the hardware and software for all the service centers of ILIS and the data center
for ILIS at the specified locations (Hyderabad and Nizamabad) for hosting the ILIS application and
database.
i. Establishing the network for the connectivity between the ILIS Service Centers and the Data
Centers.
j. Migration of the legacy paper documents and databases to the new system.
k. Setting up of required infrastructure for Digital Signature/Public Key Infrastructure
l. Setting up of Disaster Recovery Centers
m. Roll-out of the systems in all locations in the pilot district.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

n. Providing user training at all levels and preparing supporting documentation such as User
Manuals, Maintenance Manuals, etc.
o. Ensuring that the performance is in conformity with the Service Level Agreement.
p. Providing standards-based documentation on all aspects related to the project.
q. Providing ongoing maintenance support, upgrades and enhancements to the systems.

Apart from the implementation partner with the wide ranging responsibilities mentioned above, ILIS
also envisages other categories of private players in the post implementation phase. They are,
a. Information service providers (Class I) licensed by ILIS to provide information search services
(e.g., title search, transaction history search, document search, etc.)
b. Information service providers (Class II) licensed by ILIS to accept applications in respect of
transactional services (e.g., title transfer, mortgage, etc.)
c. Private Surveyors licensed by ILIS to perform sub-division of properties and submit revised
parcel maps to ILIS office for approval. They can also offer other services to users like,
demarcation of boundaries, planting of field stones, etc.

Though ILIS is still in a very nascent stage of implementation, it is the first project in the country to
provide a much greater role to the private sector in land records management.

c. Statewide Rollout of Computerized Registration & Land Records Systems – Punjab

i. About the project:

Another State which is moving towards a statewide rollout of its computerized land records &
registration systems through a PPP mode is Punjab. With the positive response received from the
public for the pilot implementations, Government of Punjab decided in April 2005 that the
computerized registration & land records systems will be rolled out in 153 locations in the State. For
this purpose, the Government has opted for the PPP mode & presently, is in process of selecting the
private partner.

ii. Extent of Private Participation:

As per the proposed arrangement, the Government would provide ready site (including civil work, air
conditioning, power and data cabling) with core applications (land records software & registration
software), software licenses for server operating systems, database licenses and any other special
software licenses required to operate the said applications. The scope of work for the Private Partner
on Build-Own-Operate-Transfer Model is as follows:
a. Supply, install and commission servers, switches and routers on upfront payment basis.
b. Supply install and commission desktop PCs, printer, UPS, generator, CD cabinets etc. on service
charge basis.
c. Deployment of requisite resources.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

d. Providing general facility /infrastructural / environmental support systems, safety and security
measures in Citizen Service Centers.
e. Appropriate replacement and /or replenishment of systems
f. Data digitization
g. Operations & maintenance of hardware & software, equipments, network etc.
h. Facility Management including management of infrastructure, utilities (like electricity, telephone
etc.), ensuring safety and security of equipment of resources and data etc.
i. Installation of current & future upgraded versions of Land Records and Registration applications
and configuration, initialization & master data entry as & when required.
j. Data migration & porting at all stages.
k. Ensure data security, maintenance, management, backup, archival, retrieval & recovery.
l. Providing services at CSCs
m. Back-office operations like generation of MIS reports etc.
n. Training and assistance to respective officials for using the application at front desk counter
machines.

d. Computerization of Registration Department of Maharastra – SARITA Project

i. About the project: India follows deed registration system and the ‘Department of Registration’ at
state level is entrusted with the responsibility of registering the property transactions. The Department
of Stamps & Registration of Maharastra (one of the large states of India) is the second highest
revenue generating department for the Government of Maharashtra. However, the department had a
poor image due to very poor client satisfaction. This can be attributed to the fact that the Sub-
Registrar (head of lowest level office in the department hierarchy) enjoyed great discretion vis-a-vis
registering the document, ascertaining value of the property and the time frame of returning the
original document to the party. The other major lacunae were non-uniform, often faulty, processes
with no time standards. As a result, the registration of land or property transaction took weeks and the
original document could not be returned for months/ years. The system bred inordinate delays,
harassment and corruption leaving a very bad aftertaste for all those who had to come to the Sub-
Registrar Offices for deed registrations.

The turnaround process within the Department started with the process changes followed by
computerization project named SARITA. The department looked at impending computerization as an
excuse for full review of its processes and functioning and to make bold changes, wherever
necessary, to provide world-class public service & better client satisfaction.

ii. Extent of Private Participation:

To address the burden of capital costs of statewide rollout & host of other public sector issues, the
Government teamed up with private sector. The concept was to bring in a private partner who would

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

install, operate and maintain the hardware across all offices and recover his investments from service
fees charged to the client in return of top class services being provided. The roles of both the private
partner and the department personnel were clearly spelt out. The major terms and conditions
contracted by the state with the PPP vendor were:
ƒ Provide for all the hardware and peripherals required to meet the desired service standards
ƒ Deploy all hardware to various locations, ensure installation & commissioning of the setup
ƒ Maintain the hardware regularly up-to predetermined standards
ƒ Provide anti-virus kits
ƒ Keep the set up at all locations functional and operational
ƒ Install all requisite software at various locations and provide for software up-gradation,
whenever necessary (registration software was provided by the government)
ƒ Provide furniture as per standard design and layout
ƒ Maintain buffer stock for meeting emergencies and to provide consumables as per
requirement.
ƒ Provide manpower at the front end that will handle:
o Data entry
o Scanning the original registered document.
o Archiving on CDs at regular intervals
o Other related activities such as capturing thumbprints with thumbprint scanner, digital
signature, photographs of parties with web (computer-attached) cameras etc.

The agreement with the vendor included maintenance standards (e.g., 95% uptime), upgradation
standards (e.g., latest versions of software), service level standards (e.g., 25 minutes for service
completion), penalties (e.g., encashment of bank guarantee) and incentives (financial).

Project SARITA, which became fully operational across the state by May 2002, turned out to be a
highly successful one and is recognized as one of the 3 best eGovernance projects of India that can
be replicated across the country.

5. International Trends

In this section a few relevant and successful case studies are presented to bring out the essence of
the private partnership mode in public operations in countries other than India. The critical elements
from these studies may be considered as way forward in the Indian scenario, giving due consideration
to the local environment and Government framework, as they exist in India.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

Case Study 1: Land Registry of England & Wales

a. Background: The property market in England and Wales is a very active one, with approximately
£1million worth of property transactions processed every minute. As the government department
responsible for maintaining records of land ownership, Land Registry guarantees the title for £2.5
trillion worth of property. Established in 1862 and self-financing by law, Land Registry receives no
public funds, covering its costs solely through fees.

b. The Challenge: For many years, the staff in local offices used terminals to access information in
the mainframe database to provide services to local constituents. In the late ‘90s, Land Registry
developed a powerful new electronic mapping application that would significantly improve service and
efficiencies, but which required a robust distributed IT infrastructure. The challenge was to move from
6,500 dumb terminals to a network of PCs, clustered servers & LANs. In addition, Land Registry
wanted to complete the first phase of the project quickly, installing the first 2,500 PCs with servers and
LANs in all 24 offices—and integrating them with the centralized systems, all within 6 to 8 months.

c. Action plan: Land Registry’s IT Services staff was very knowledgeable and successful in
developing and managing the mainframe systems, database, and applications at the heart of the
business. Rather than dilute that focus and embark upon extensive hiring and training, Land Registry
sought a partner with distributed IT capabilities to mirror its centralized IT expertise.

After an extensive 18-month tendering and evaluation process (1998-99), Land Registry awarded
Hewlett Packard (HP) ten-year contract for ₤71 million to act as its strategic IT partner in a UK
Government Public Private Partnership. In addition to immediate objectives, Land Registry wanted
HP to be a strategic partner, who could work with them over the long term to evolve the infrastructure
required to support future e-business initiatives.

d. Current scenario: Today, HP, the strategic IT partner of Land Registry,

– Designs, builds, supplies, operates, supports, maintains, finances, and upgrades/refreshes
the entire distributed hardware, software, and network infrastructure, including: Microsoft
Exchange and Office XP applications; corporate intranet; 9,500 desktop systems; 2,000
printers; 200 clustered servers; and an end-to-end, fully redundant LAN/WAN infrastructure.
– Manages every aspect of the infrastructure, including products and services from such
vendors as Microsoft, Cisco, Cable and Wireless, and BT.
– Underwrites the entire infrastructure, and provides it to Land Registry at a fixed, per-seat
price.
HP consultants and solution architects, using proven ITSM methods, developed the security
architecture, enabling Web access to Land Registry systems, and are now developing a single IT
architecture to integrate Land Registry’s centralized and distributed infrastructures.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

e. Benefits: Due in part to dropping mortgage interest rates, each of the last three years has been a
“record year” in the number of transactions handled by Land Registry. However, the per unit
transaction costs have steadily dropped. As noted in its most recently published Annual Report, Land
Registry has been able to achieve or exceed all its key performance targets, despite receiving 20%
more work; outstanding casework is at its lowest in 25 years; and more than 98% of its customers
report being either very satisfied or satisfied with the full range of Land Registry services. As a
government entity, Land Registry must be agile enough to respond quickly to changes in the law, as
well as to changes in technology and customer expectations. Recently, Land Registry successfully
met the demands of new legislation that completely replaced the statutory framework for land
registration in place since 1925.

A core HP Services team of 18 people works alongside Registry’s IT Services staff based in
Plymouth, calling on the full range of HP resources, as well as provisioning and managing solutions
from multiple providers to meet changing Registry needs.

To sum up, benefits to Land Registry include,

– More valuable and convenient services offered to a larger constituency, at a lower cost per
transaction
– Agreed upon service levels at a predictable cost, with a single point of management
accountability
– Centralized and distributed IT infrastructures evolve in tandem to support new Web services
and e-government initiatives, providing greater agility while continuing to cut costs

Case Study 2: Turkish Land Registry and Cadastre (LRC)

Turkish Land Registry and Cadastre (LRC) belongs to the Ministry of Building and Public Works. LRC
started its legal cadastre works in 1923, with the aim of forming title registers defined in Turkish Civil
Law. In this context, this organization has undertaken the duty of defining the geometrical and legal
situations of properties in the boundary of Turkey. Until 1980’s, cadastral works have been in
monopoly of the State and carried on solely by the LRC, even though the related period cadastre law
provided for technical surveys to be done by the private sector with the approval of Government.

Since mid 1980s, LRC had tendered the triangulation works of about eight districts to private sector.
Besides, in some of these districts, cadastral surveys and mapping of properties have also been done
by private sector. With this application, the period of public-private partnership started in cadastral
works in Turkey.

In recent years, a project named Turkish Land Information System (TAKBIS) has been started as a
pilot application. This project has been done by private sector in the control of the LRC. In this project,

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

the responsibility of the private sector includes analysis, design & development of software and
provision of training to staff.

Summary

A study was conducted by the United Nations Economic Commission for Europe (UNECE) in the year
2003, amongst the member countries to assess the use of PPP amongst land administration
authorities in the UNECE region. Questionnaires were sent to 43 UNECE countries and 7 Canadian
provinces. Of the 26 responses, 6 countries (representing 23% of the total number of replies)
indicated that they have no PPP arrangements. Of the 20 countries/ provinces indicating that they
have some form of PPP arrangements:
ƒ 60% indicated that their governments have introduced policies to support PPP
ƒ 80% indicated that their land administration authorities have entered into PPP arrangements
ƒ 80% indicated that PPP arrangements had been made through a formal tendering process
ƒ 95% have contracts in place governing PPP arrangements
ƒ In respect of the perceived benefits of PPP, majority of respondents cited improved service
delivery and reduced costs.

Following Table 3 presents a snap-shot of the extent of participation of the private sector in various
cadastral processes in the member countries of the European Union.

Table 3: The Role of Private and Public Sector in Cadastral Stages in the EU Countries

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

6. Conclusion

Land administration activities lie at the heart of good governance and land administration represents a
key area of public responsibilities and actions. With proper safeguards and good management, it is
possible for some specific activities to be transferred to the private sector under appropriate PPP
arrangements. The extent of private sector involvement in land records management in India needs
to be carefully considered in order to find a reasonable and harmonious balance. Within the legal
requirements, the land registry, cadastral and other organizations concerned with land administration
should seek partnerships with the private sector to facilitate accurate, fast, inexpensive and customer
friendly access to land information and its usage. By sharing resources and knowledge, both parties
profit from synergies, shared risk and technological developments, which otherwise would not take
place. The sharing arrangement also allows for good practice in “equal opportunity” matters to be
taken forward. The successful application of PPP in land records management requires new attitudes
and skills when such partnerships are in the public interest.

To sum up, the liability and guarantee of the State for the contents of the land records should remain
unaffected. In addition, the provision of an infrastructure for land administration, including the
development of the legal framework, standards and information exchange procedures, should remain
government responsibilities. Private sector participation should be encouraged in operational
activities like service delivery, performing back-office functions, maintenance of infrastructure, etc.
Land administration activities are dynamic and PPP offer greater flexibility in the management of
change than a single-purpose organization or agency could provide.

7. Reference Material

In preparation of this paper on ‘Cost recovery policies, PPPs and sustainability of land records
management in India’, the following discussion papers, reports, articles, etc. have been extensively
used.
ƒ PwC India Reports prepared as a part of ‘Program for Roll out of Successful E-Governance
Projects in India’ and other PwC sources on land records.
ƒ Rajeev Chawla, PwC, Wipro & ICICI Infotech (2003), Rollout of successful e-Governance
projects, Bhoomi – A Case Study
ƒ PwC, Wipro & ICICI Infotech (2003), Rollout of successful e-Governance projects, Sarita – A
Case Study
ƒ PwC India (2005) ‘Business Model for Integrated Land Information system for the State of Andhra
Pradesh’
ƒ Peter Creuzer (2002), Land Administration In Public Private Partnerships. Paper presented in the
workshop on Customers – Co-operation – Services, Vienna
ƒ European Commission (2003), Guidelines for Successful Public Private Partnership.

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Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

ƒ Case Study – Land Registry maps a course to e-Government in the UK – HP success story.
ƒ Paper prepared by the Working Party on Land Administration (2005), United Nations Economic
Commission For Europe – Guiding Principles for Public Private Partnerships (PPP) in Land
Administration
ƒ Discussion paper prepared by P. Creuzer, J. Valis, F. de la Puente, B. Kjellson and A. Overchuk
on the topic Public-Private Partnership and Providing Open Access to Land Information for the
second session of the Working Party on Land Administration (2001), United Nations Economic
Commission For Europe
ƒ M. Mostafa Radwan, M. Hesham Nasr, Christiaan Lemmen & Sohir Hussein (2005). Presentation
made at FIG/GSDI 8 Working Week 2005, Cairo, Egypt on The Egyptian Survey Authority
Business Model to Strengthen Public Private Partnership in the Real Estate Industry
ƒ Discussion paper prepared by P. Creuzer and B. Kjellson on the topic Public-Private Partnership
in Land Administration for the fourth session of the Working Party on Land Administration (2005),
United Nations Economic Commission For Europe
ƒ Ayse Yavuz and Cemal Biyik (2004). Paper presented at FIG Working Week 2004 on Public-
Private Partnership in Cadastre: The Case of Turkey and the EU Countries
ƒ Jurg Kaufmann and Daniel Steudler with Working Group 7.1 of FIG Commission 7 (1998),
Cadastre 2014 - A Vision for a Future Cadastral System
ƒ Dr.N.Saxena (2004), Institutional Framework for Land Administration in India: Issues and
Challenges

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