ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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The Land Market in Development: A Case Study of Punjab in Pakistan and India

This paper aims to shed light on the hitherto neglected issue of land in development. It examines the process of land market development in the former Punjab from when private ownership of land was established in mid-19th century, up to the present. It is found that as against the assumption of the classical rent theory, the price of land has been increasing much faster than rent. The differential growth rate between rent and the price of land is attributable, among other things, to the unregulated land market and excess liquidity at the micro level. The rapidly increasing capital gains in land transactions is a land bubble. It has to be realised that the bubble in India and Pakistan is difficult to burst, since it is mostly financed from outside the financial market. If the land bubble is left unattended to, the disparity between receivers and payers of rent will widen and it will retard private as well as the public investment necessary for development in the near future.

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