Sony Pellissery, Sattwick Dey Biswas, Varun Panickar, and Saishree Priyadarshini

Exploring the ‘Credibility Thesis’ in Indian Informal Settlements

The proliferation of informal settlements is one of the most pressing issues facing cities of the global South. The traditional response has been to work towards ‘tenure security’. Hernando de Soto proposes a neoliberal solution to urban landlessness in his book, The Mystery of Capital. He argues that the state should provide formal property rights to people who have been using a piece of land over a period of time but do not have legal ownership over it. The prescriptive process is simple. With formal documentation of property rights, the users of informal land will be able to transform ‘dead’ property or land into productive assets, to their own benefit as well as that of society, the state, and the world economy. In this context, property without forward and backward linkages with the market economy is considered dead. By this logic, turning dead capital (in the form of informal land) into assets is the shortest and easiest route to making poor people rich. However, this market-led approach has an endemic problem: it is susceptible to structures of accumulation.

A recent study by a team of NLSIU researchers, funded by the Nudge Foundation, was tasked with reviewing alternative approaches to slum property titling. The team examined the potential of the ‘Social Function of Property’ (SFP) theory in the context of Indian property case laws. The findings of the six-month study were presented in a policy dialogue workshop organised by the Nudge Foundation in February 2022.

Examining case laws using the SFP lens

SFP shifts the discourse from the continuum of secure–insecure tenure to productive–unproductive property. Within this framework, the ‘credibility’ of property is based on its productive function. The focus is therefore on identifying legitimate social practices in property relations. What are productive functions of informal property that are recognised in Indian case laws? This was our point of inquiry.

The study adopted an iterative analysis. Based on an initial literature review, we identified eight core principles of SFP, which later formed our analytical tools (see Figure 1, first axis):

1. the rule of productivity;

2. prioritising public interest over individual interest;

3. imposition of some kind of tax to satisfy the distributional aspect of property;

4. obligations of owners to refrain from using their property in ways that could harm others;

5. maintenance of public land, along with barrier-free access;

6. recognition of certain rights of non-owners over the property (e.g., right to pass through the land);

7. the power of the state to force the owner to use property in a certain way (e.g., to ensure safety norms); and

8. ensuring all individuals’ access to the minimum property to realise central human capabilities or human flourishing.

To learn whether these principles had been applied in Indian property case laws, we used purposive sampling to select prominent property case laws in India. We examined 39 property disputes and 10 slum eviction cases. Our analytical focus was on whether proxy records (patta) had been considered to gauge the social function of land in cases involving land without title. The second axis comprised the principles laid out in the judgments of the cases we studied. We examined the scope of applying SFP principles in each case law. Then, we coded each principle that had been violated or upheld by implication.

The study examined the extent to which each judicial pronouncement had considered SFP principles while deciding cases. We looked at specific court cases of public interest, and applied the principles of SFP to see if the court found them as legitimate reasons to uphold public interest. Second, we asked whether the evidence that supported the claims of property title in informal settlements was based on productive use arguments. Assessing the evidence presented by the claimants (evictees), we analysed whether it bore productive use of the property, and to what extent this productive logic had been acknowledged in the court judgement.

Figure 1: Multidimensionality of SFP through Indian Property Case Laws (Source: Authors’ analysis)


We found that Principle 1, i.e. the productive function of property—central to SFP—was least applied in Indian court cases on property. The two that were acknowledged in some measure were Principle 2, prioritising public interest over individual interests, and Principle 7, the power of the state to force the owner to use property in a certain way (see Figure 1).

The Social Function of Property approach emphasises how property gains credibility through its function. Prioritising functionality over form (formally owned or informally used) involves the recognition of intangible aspects of property rights. It is here that SFP as a framework meets the informal use of land. The credibility hypothesis of property foregrounds the claims made by citizens in an informal context. It acknowledges them as acts of citizens seeking access to the city. What does it mean for urban India if the only recognition of informal settlements by the state lies in their inhabitants’ political value as a vote bank? A constructive response to this question will involve demanding the recognition of other socio-economic rights as equal functions of informal settlements.

Our study found that several problems endemic to Indian urbanism could be effectively addressed by considering the principles of SFP. For instance, vacant apartments (purchased as speculative investments) pose a moral problem in cities where over 30 per cent of the population lives in slums. Prioritising the function of property over its form could liberate exclusionary property regimes from the clutches of the primacy of capital.

Slums and informal housing accommodate a majority of the urban Indian population. They will continue to grow over the coming decades. The state and other public bodies have attempted to deal with this informality by way of addressing issues such as public health, quality of life, crime, pollution, and the extra-legal nature of their existence. Typically, state responses have involved ‘title formalisation’ or eviction. However, this approach has failed to establish more functional state-sanctioned property regimes to accommodate those who use informal housing. SFP seeks the recognition of everyday land use, and thus produces non-state welfare provisions. In other words, while the state may concern itself only with formality and informality of property, we need to acknowledge the role of the community  and the market while taking cognizance of the variety of informal uses of land for poor citizens. These non-state arrangements are often more robust than existing welfare provisions extended by the state.