Distortions in land markets and their implications to credit generation in India

K.P. Krishnan (), Venkatesh Panchapagesan and Madalasa Venkataraman
Additional contact information
K.P. Krishnan: Department of Land Resources, Government of India
Venkatesh Panchapagesan: Indian Institute of Management, Bangalore
Madalasa Venkataraman: Indian Institute of Management, Bangalore

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: Land and buildings are a preferred collateral for lenders in India due to its ease of valuation and disposal in the event of default. Yet several distortions afflict Indian land markets that make this exercise non-trivial. These distortions - some structural, some regulatory and some information driven - are costly and have far reaching implications on credit availability as lenders adopt conservative policies ex-ante to mitigate these costs. We examine some of these distortions in the Indian land markets in this paper and highlight their significance to the current debate on reforming bankruptcy framework in India. The first part of the paper discusses structural, regulatory and informational gaps that limit lenders' ability to lend against land as well as liquidate after default. In the second part, we propose some opportunistic and structural reforms in the land markets that could enable borrowers to effectively monetize land in credit markets.

Keywords: Land as collateral; collateral registries; land titles; prior liens and encumbrances; valuation; state vs. central government (search for similar items in EconPapers)
JEL-codes: G21 G28 G33 K11 Q15 R3 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.igidr.ac.in/pdf/publication/WP-2016-005.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2016-005

Access Statistics for this paper

More papers in Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India Contact information at EDIRC.
Bibliographic data for series maintained by Shamprasad M. Pujar ().