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World: Liberating India And Its Poor, One Dollar And One Property At A Time – by Alejandro Chafuen

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When analyzing economic development few cases have much appeal and impact as the reforms in India. Any small change in a country with over 1.2 billion people affects the world. This is a chance to make a change with just $1.

Just over two decades ago India began liberalizing trade, investments, and other sectors of the economy. More prudent fiscal and monetary policies led to lower inflation and the country, which used to beg for international aid, turned into a potential superpower. Much remains to be done and inflation is on the rise, but the way we look at India has changed.

Thanks in great part to Indian reforms, advocates for free enterprise can claim that the increased globalization has greatly reduced extreme poverty and inequality. Xavier Sala-I-Martin showed that when measured “globally” income inequality started a two-decade-long process of decline after the ’70s. But the improvement came mainly from a few countries: “despite the fact that inequality within China, within Russia, within the United States, and within many other countries has gone up, the growth of some of the largest and poorest countries in the world (most notably China, India, and the rest of Asia) has tended to reduce overall income inequality across the citizens of the world.”

Advocates for free-markets tend to neglect studies of inequality. Commonly used measurements show, for example, that the U.S. has more inequality than India. U.S. income per capita, however, is 15 to 30 times higher in purchasing power and nominal terms. Why focus on inequality then? Because apart from natural inequalities we have man made inequalities. These result from unjust legal frameworks which in turn create an unequal distribution of economic freedom. Unequal access to secure property rights is a good example.

There are still many barriers to property rights in India. From 2005 to 2010 protection for property rights went down from 7.88 to 5.49 in the measurement compiled by the Fraser Institute. In the 2013 Index of economic freedom assembled by The Heritage Foundation, India still scores a 5 out of 10, same as two decades ago.

Private property is so essential that the authors of the Fraser Index argue that economic freedom “should measure the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions.” But it only releases its power when protected by secure and well-defined titles. It is in this area where India needs much improvement.

The Liberty Institute, a public policy think tank, in collaboration with the Action Research in Community Health (ARCH), a Gujarat based NGO engaged in rural development, are working to empower millions through property rights. Their new effort to grant well defined property titles stands on three pillars, grass-roots bottom up activity, sound economics and new technologies. As they state in the promotional material, “the aim of this initiative is to map the agriculture and common land of villagers, by collecting the lat/long coordinates for the plots, information about their ownership claims and land usage.”

They train local people in using GPS devices, and reading maps and satellite images.  The information is used to document their land claims which are then reviewed at the village general meetings (gram sabhas), and either approved or rejected. Currently, about 150 villages are being covered under this initiative. This is an effort to implement the Forest Rights Act of 2006, which for the first time recognizes the land rights of forest dwelling communities, including about 100 million people and at least 25 million plots.

The lack of clear property titles clogs the judicial system. It is estimated that around 80% of the cases, particularly before the lower judiciary in almost every state are related to land. This creates opportunities for corruption. If “good fences make good neighbors” their lack maximizes problems. Over 10% of murders in the country are related to land disputes.

Olivia Enos of the Heritage Foundation writes about two recent court decisions that will impact the state of property rights. “First, the court ruled that the villagers must consent to land mining projects before they begin. And the second case ruled that the state of Gujarat must review all land claims rejected within the past two years due to the kind of information generated by the Liberty Institute’s project.”

The use of this technology has already resulted in dramatic improvement in the approval of claims in a few villages. Barun Mitra, founder and leader of the Liberty Institute, who has been working to implement market solutions for almost two decades, seems energized as never before. He tells me about the case of Amarsingh Vasava, who is secretary of the village Forest Rights Committee in Andu village in Dediapada taluka a sub-district in Narmada, state of Gujarat: “In his village the district authorities had earlier rejected as many as 70 out of the total 117 claims. But by submitting these maps with satellite images during the appeal hearings, they were able to get as many as 66 of these claims approved and that too for full area under their cultivation!”

All these families who have received titles for their lands will no longer face the daily harassment from bureaucracies. Secure titles also opens the doors for approval and assistance for other improvements such as digging wells and leveling land. This would go a long way toward improving their productivity and income. Somabhai Vasava of village Sagai, of the same taluka (group of villages) had a similar story to tell. Using these maps they were able to get all of 53 claims approved, which were earlier rejected by the district authorities. Such high rates of approval have generated tremendous enthusiasm in other nearby villages. Overall ARCH hopes to average 90% success.

Thanks to new technologies and liberalization one can check the project and identify the villages on-line, or donate directly or through U.S. charities. Barun Mitra and Anil Patel of ARCH make it easy to join in this effort. They summarize their liberating pitch: “For just 1 dollar this land could belong to their family; 250 dollars could entitle a whole village to their land rights; 500 dollars could buy us 2 GPS instruments to survey village after village.”

 Savannah Tibbetts, Junior at Hillsdale College (‘15), conducted research for this piece.

* Alejandro Antonio (Alex) Chafuen, Ph.D., has been president of Atlas Economic Research Foundation since 1991. A member of the board of advisors to The Center for Vision & Values and a trustee of Grove City College, he is also the president and founder of theHispanic American Center of Economic Research. Dr. Chafuen serves on several boards including the Chase Foundation of Virginia, the Acton Institute, the Fraser Institute (Canada), and is an Active Honorary Member of the John Templeton Foundation.

Source: Forbes.com

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