'50% of corporate land assets are idle’: Nandan Nilekani advocates for this reform to unlock trapped capital

Infosys co-founder Nandan Nilekani has emphasized the potential of land asset tokenisation to unlock trapped capital as he outlined a transformative vision for India's land market. Speaking at the Arkam Annual Meet, Nilekani highlighted that nearly 50% of the land assets owned by corporate entities remain non-tradeable, non-saleable, and ineligible for loans, making them idle assets in economic terms.

"We believe that tokenisation of land assets can change this. Every piece of land can be tokenised and traded easily," he said during his keynote session, The Great Unlock: India in 2035, envisioning a system where landowners could either sell their assets or leverage them for loans to fund businesses.

However, Nilekani acknowledged that land regulation is a state subject, meaning the success of land tokenisation will depend on individual state policies regarding registration, property taxes, and digital infrastructure. He expressed confidence that as more states recognise its potential, wider adoption will follow, enabling landowners to monetise their holdings more effectively.

He further emphasized that fintech-powered land monetisation could bring an additional surge of capital liquidity, creating a new wave of economic growth. "This will unlock even more capital and give further momentum on the capital side," Nilekani noted.

What is land tokenization?

Land tokenisation is the process of converting physical land ownership rights into digital tokens on a blockchain or digital ledger. This allows land assets to be fractionalised, traded, or used as collateral more easily, unlocking liquidity in traditionally illiquid real estate markets.

Tokenisation converts land ownership into digital tokens, enabling easier trading, collateralization, and fractional ownership. These tokens, stored on a blockchain, securely record land details such as title, size, and value, reducing fraud and disputes. Tokenised land can be bought, sold, or used as loan collateral without lengthy legal procedures. Additionally, fractional ownership allows multiple investors to own shares in a property, unlocking liquidity in real estate markets.

The move can increases liquidity, reduces bureaucracy and enhance transparency all while unlocking capital. It is practiced in Dubai, some regions in Switzerland and the US. The EU and UK have seen pilot projects.