Mr. Hernando de Soto is considered one of the most important development leaders and the world's influential voices on the economics of poverty in developing countries. He is known for his work on the informal sector and the importance of small business in a market economy. His path-breaking work on the 'legal empowerment of the entrepreneurs among the poor' has been followed with keen interest across the globe. His seminal work, titled The Mystery of Capital outlines how a lack of property rights predisposes the poor in developing nations from being profitable entrepreneurs beyond the extra legal sphere. However the solution to poverty alleviation lies with the capital already with the poor. If it is possible to unlock that hidden wealth that already exists, developing nations will go a long way towards poverty alleviation.

The purpose of the meeting was to conduct an in-depth discussion with Mr. Hernando de Soto on the accordance of property rights to the urban poor especially in light of the Flagship programmes of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) - Basic Services to the Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP), Swarna Jayanti Shari Rozgar Yojana (SJSRY) and the proposed Rajiv Awas Yojana (RAY).

Minister (HUPA & T) informed the gathering of the current status of the JNNURM programme. In particular she highlighted how under JNNURM, projects costing more than Rs.34,500 crores for the construction of about 15 lakh houses along with basic facilities to the urban poor, especially slum-dwellers have been sanctioned. Facilities in these sanctioned houses include: water, sanitation, education, health, social security, recreation, informal sector markets, etc. Minister (HUPA & T) also emphasized how JNNURM has evolved into an attempt to draw the focus of State Governments and Urban Local Bodies on the need for wide-ranging reforms in the regulation of urban land and housing markets, city financing and governance structures and mechanisms.

Under Rajiv Awas Yojana (RAY), Minister highlighted how M/o HUPA intended to extend support to States/UTs that are willing to assign property rights to people living in slum areas under a whole city, whole slum approach.

In the course of the meeting, Mr. Hernando de Soto discussed his experiences in Peru, and in particular the reform period between 1988 and 1995 where an administrative reform of the Peruvian property rights system was undertaken by the elimination of bureaucratic “red-tape” and restrictive registration that prevented free entrepreneurship especially of the poor. In addition to South America, Mr. Hernando de Soto also outlined his experiences in countries like Egypt, the Philippines, and Tanzania where he undertook a study of the kinds of extralegal and informal understandings that existed among the poor to determine ownership of assets. Through such studies, he was able to recommend to the governments' concerned the methods by which formalization of the extralegal markets could take place to ensure adequate space and security for poor entrepreneurs to thrive. In doing so Mr. Herando de Soto was able to demonstrate how through effective assignment of property rights, there could be a sustainable improvement in housing and employment of the poor.

In the background of existing schemes of JNNURM and SJSRY and the proposed Rajiv Awas Yojana (RAY), Minister, Kumari Selja, chaired a lively discussion with participants debating the adoption of a 'rights-based approach' versus a 'slum/site specific development' approach in the according of property rights to the urban poor. Minister also expressed the apprehension of various practitioners in the field that once property rights were granted, slum dwellers or the poor could sell their property and squat elsewhere. In this case the august gathering deliberated over whether a system of progressive security of tenure was preferable to an outright system of property rights.

While acknowledging that vested interests operate among the urban poor, Minister expressed her concern in ensuring that these vested interests do not trump those of the urban poor in the allocation of property rights. Minister also stated that in many cases in slums in urban India, informal arrangements for living are often 'verbal'. Those sub-letting or occupying space have no way to prove that they have the “right” to occupy the space. In connection with this, the effectiveness of collective rights over individual rights was debated. Mr. Hernando de Soto clarified that collective rights were temporary. His aim was to ensure that the individual person, whatever his socio-economic state, must eventually be given access to the much larger market where his/her transactions and ownership of assets are both protected and recognized. In a collective system this may not be possible. He clarified that there would always be a danger of people who would try to deceive and/or prey on the poor; however this should not be an excuse for not granting them property rights to their assets.

Mr. Hernando de Soto also cautioned the government from looking at a system of property rights in a vacuum. He believed that it was necessary to build a system of public memory that legally identifies all their people, their assets, their business records and their transactions in such a way that they can unleash their economic potential to benefit, both themselves and the country at large.