4 June 2024

This article explores the historical and ongoing legal and legislative tussle over the right to property in India.                

Controversy Surrounding Property Rights:

• Introduction to the Issue: The right to property has been a contentious issue in India, undergoing significant changes since independence.

• John Adams’s quote, “Property is surely a right of mankind as real as liberty,” reflects the importance of property rights.
• Initially a fundamental right, the right to property has experienced a fierce struggle between the judiciary and the legislature.

• Debate Over Compensation: Initially, the Supreme Court of India interpreted compensation in Article 31(2) of the Constitution as "a just equivalent of what the owner has been deprived of," leading to several amendments by the legislature to limit judicial scrutiny over compensation.
• Word Substitution: The Constitution (Twenty-Fifth Amendment) Act, 1971 replaced the word "compensation" with "amount," intending to prevent courts from questioning the adequacy of compensation, which was a strategic move to facilitate property acquisition by the state.

Global Gender Gap Concerns and Policy Implications:

• Widening Gender Gap: The debate over property rights has parallels in discussions on gender equality, highlighting how legal and policy changes can impact marginalized groups differently.
• Impact on Property Ownership: The shift from fundamental to constitutional rights for property ownership reflects broader policy implications, similar to how gender-based policies can influence workforce participation and social equity.
• Concerns Over Social Stigma: Ensuring fair compensation for property acquisition without perpetuating social stigma is crucial, akin to addressing menstrual health without reinforcing gender stereotypes.

Challenges of Implementation and Ensuring Inclusivity:

• Implementation Hurdles: Implementing fair compensation for property acquisition involves significant challenges, including ensuring transparency, accountability, and adherence to principles of natural justice.
• Enforcement Challenges: Misuse or inappropriate enforcement of property acquisition laws can lead to public distrust and legal challenges, highlighting the need for robust legal frameworks and enforcement mechanisms.
• Promoting Inclusivity and Individual Support: Recognizing diverse property ownership experiences and tailoring support to individual needs is essential for fostering an equitable legal environment, similar to promoting inclusivity in gender-related policies.

Recent Developments

• Kolkata Municipal Corporation Case: The Supreme Court identified seven facets protected under Article 300-A:

• Right to notice
• Right to be heard
• Right to a reasoned decision
• Duty to acquire only for public purpose
• Right to restitution or fair compensation
• Right to an efficient and expeditious process
• Right of conclusion

Conclusion

• The requirement for compensation has been reinstated to a standard similar to the original interpretation in the Bela Banerjee case.
• The decision in the Kolkata Municipal Corporation case reinforces the notion that property rights in India now enjoy protection not seen before, even surpassing the provisions during British rule and early independent India.

GS 3 : Indian Economy – Infrastructure – Roads

Investment in road infrastructure in India is on the rise, driven by increased highway development, toll revenue, and toll hikes.

Infrastructure Investment Trusts (InvITs):

• Infrastructure Investment Trusts (InvITs) are investment vehicles that pool funds from investors to invest in infrastructure projects, particularly in sectors like roads, railways, and energy.
• They allow investors to participate in infrastructure projects and earn returns through dividends and capital appreciation.
• InvITs play a crucial role in financing and developing infrastructure by providing long-term funding and facilitating the monetization of operational assets.

Role Infrastructure Investment Trusts (InvITs) can play In India:

• Significance for Development:

• Infrastructure Financing: InvITs provide a mechanism for pooling funds from investors to invest in infrastructure projects, thereby facilitating infrastructure development.
• Long-term Funding: InvITs offer long-term financing solutions for infrastructure projects, reducing dependency on short-term funding sources.
• Unlocking Capital: InvITs enable infrastructure developers to monetize existing assets, releasing capital for new projects and expansion.
• Risk Mitigation: InvITs diversify risk by spreading investments across multiple infrastructure assets, enhancing investor confidence and attracting more capital.

• Challenges:

• Regulatory Complexity: Regulatory requirements and compliance burdens may deter potential investors and issuers.
• Asset Quality: Ensuring a steady pipeline of high-quality infrastructure assets suitable for InvITs can be challenging.
• Market Volatility: Fluctuations in market conditions and investor sentiment may affect the performance and valuation of InvITs.
• Investor Education: Lack of awareness and understanding among retail investors about InvITs may hinder their adoption.

• Way Forward:

• Simplification of Regulations: Streamline regulatory processes and reduce compliance burdens to encourage greater participation in InvITs.
• Asset Pipeline Development: Continue efforts to develop a robust pipeline of infrastructure projects suitable for InvITs through government initiatives and private sector partnerships.
• Investor Awareness: Conduct investor education programs to increase awareness and understanding of InvITs among retail investors.
• Risk Mitigation Measures: Implement measures to enhance transparency, governance, and risk management practices within InvITs to improve investor confidence.
• Market Demand: Introduce incentives and tax breaks to stimulate demand for InvITs and attract more institutional investors.