Shirish Patel has a good piece in today’s Indian Express in which he writes about the recent remarks by President of India in the Parliament. She said:
“to states that are willing to assign property rights to people living in slum areas...to create a slum free India in five years.”
Further Mr Patel writes:
“Hernando de Soto, the distinguished Peruvian economist, in his book The Mystery of Capital asks why capitalism is a success in the West and a failure everywhere else. He concludes that it first happened because of the almost inadvertent creation of property rights, properly documented and enforceable. Originally designed to settle disputes, these recorded property rights have then provided the collateral needed to raise capital, and thus underpinned the entire process of funding innovation and entrepreneurship. In other words, capital comes to life because of enforceable property rights. The greater the number of people who have marketable, enforceable property rights, the bigger will be the pool of potential business talent and enterprise. The eventual result should be a stronger economy. Perhaps it is the poor who can make our country rich (and help themselves in the process).
So the proposal to assign property rights to those living is slums is entirely laudable. It gives the poor the same access to legal property transfers as are already enjoyed by the rich. And if they have the freedom to offer property as collateral it has the potential of opening up for the poor opportunities for access to capital as are already available to the rich. Now for the caveats.”
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