Indian Elephant moves slothfully on improving property rights

Business Standard, 31 March 2011


When it comes to property rights, both physical and intellectual, India has not shown much improvement because of archaic land record system and copyright piracy, shows a latest index compiled for 129 countries that account for 97 per cent of the global output.

But then, India has also not fared poorly in International Property Rights Index (IPRI) compared to its pathetic score in other global indices like Human Development Index (HDI).

India ranked 52 in 2011 index against its position at 53rd among 125 nations a year ago. This is not as bad as its rank at 119th among 169 countries in the latest HDI compiled by the United Nations Development Programme (UNDP).

Also, its score at 5.6 points on a scale of 0-10 is just a slight improvement over 5.5 in the previous year index, compiled by Washington-based Property Rights Alliance, a civil society group.

At 5.6 points, India's score equals the mean score of 129 countries with maximum at 8.5 by Sweden and Finland and minimum at 3.4 by Venezuela.

The index uses three primary areas of property rights to create a composite score: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR).

According to the latest score, India's position on LP decreased for the third consecutive year from 4.9 in 2009 to 4.8 in 2010 and 4.7 in 2011. The report further says this is because of deterioration in rule of law and political stability.

One may argue as to how could political stability in India might have declined, as the government at the Centre as well as ruling regimes in states are comparatively more stable than earlier years. It is because the index does not measure only stay of the governments in office, but all sorts of disruptive movements like naxal and Telangana, explained Dr Parth J Shah, president of the Centre for Civil Society, partner of Property Rights Alliance in India for this index.

He said there are incidents of human rights violation in J&K and north eastern parts of the country. Besides, special and arbitrary powers are given to army through the Armed Forces Special Powers Act (AFSPA)in Jammu and Kashmir.

As expected, the report says that judicial independence is slightly on the rise in India. Without naming court's interventions in alleged scams in spectrum allocation for 2G and commonwealth games, Shah said there are instances of the judiciary challenging the executive in recent times in India.

In physical property rights, India scored 6.6 points in 2011 index, same as in 2010. However, Indian system of keeping records relating to physical property are too archaic. Even the last major land survey was conducted during British times.

"So far as property rights are concerned, the poor continue to fight the battle against forceful acquisition of their land by either the government or private parties. This remains a point of serious concern for India even as we achieve high rates of growth every year" Shah said.

In terms of intellectual property rights, India's score improved marginally to 5.5 points against 5.3 a year ago. This is attributed to improvement in professional opinions. However, the country performed poorly in terms of copyright piracy. Also, overall intellectual property rights score for India fared poorly compared to its scores in 2006 and 2007 at 5.7 points.

The report says IPRI seeks to assist underperforming countries to develop robust economies through an emphasis on sound property law. Developing countries with stronger property rights protection enjoy, on average, higher GDP growth highlighting the effects property rights can have on the economies.

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