Quite surprisingly in view of the attention devoted to the use of land as collateral, evidence on credit effects is quite limited and often focused on land titling rather than registration. Moreover, while some studies report credit effects from land titling (Feder _et al._ 1988), there are many cases where credit effects from property rights reform were expected but did not materialize (Field and Torero 2006, Galiani and Schargrodsky 2005). Failure to detect credit effects is often attributed either to insufficiently secure rights or household or land market characteristics such as risk aversion, absence of bankable projects, and illiquid land markets. High cost of registering subsequent transactions, if combined with limited benefits, often leads to a perception that the cost of registration exceeds the benefits from doing so (Deininger and Feder 2009). Whether, as implicitly assumed by approaches that focus on regulatory reform, reduction of the cost of registering and transferring property can have an impact is open to debate (Arrunada 2007) but has not been analyzed in the literature. India provides an ideal case for doing for two reasons. First, it has a system of land records with reasonably wide outreach but huge amount of duplication and inefficiency that leads to widespread conflict and property rights insecurity. At the same time, it has taken a leadership role in applying IT to land administration to make it easier to access information on property rights and reduce the cost of registering transactions.

# **2.2 The institutional setting of land administration in India**

India’s system of land administration has its origin in colonial land taxation. Most of the institutions and processes currently in place resemble closely those established under British rule when land taxes (called ‘land revenue’) constituted the main source of government income.<sup>2</sup> The primacy of revenue for land recording had two implications. First, land records were a fiscal instrument that focused on use rather than ownership and provided neither a unified spatial framework nor mechanisms or incentives for owners to register transactions to keep their records up to date. In fact, it was incumbent on the administration to update their records through revisional surveys, expected to be undertaken at generational intervals of some 30 years. Second, original settlement surveys were restricted to agricultural lands, excluding forests where the potential for revenue was low and urban areas inhabited by colonial elites who were not to be burdened with taxes. Following independence, responsibility for land policy and administration was transferred to states and the importance of land taxes declined greatly. While the Revenue Department continues to maintain textual databases for rural land records, the reduced importance of land as a revenue source led to other functions taking priority over maintenance of land information (World Bank 2007).

The flip side of the decline of the Revenue Department is the ascendancy of the Department of Stamps and Registration where deeds of land transactions are registered (stamped) and stored. Its _raison d’etre_ is

> 2 Land revenue amounted to 60% of government income in the 1840s. The magnitude of tax obligations and the modality of their collection were determined in a process called settlement that was first undertaken when a territory was incorporated into the empire. The nature of the settlement process continues to affect the nature and quality of land institutions and the nature subsequent growth (Banerjee and Iyer 2005).

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