MC EXPLAINER What does Infosys co-founder Nandan Nilekani’s land tokenisation pitch mean for India?

Infosys Chairman and co-founder Nandan Nilekani.

Infosys co-founder Nandan Nilekani wants India to unlock its most illiquid form of wealth, land, by turning it into a digital financial asset. Speaking at the Arkam Ventures Annual Meet in Bengaluru in March, Nilekani proposed tokenising land assets, which would make them tradable or usable as collateral, much like stocks or bonds.

His pitch is based on a simple premise: nearly half of all household wealth in India is held in land, but much of it remains economically inactive. Tokenisation, he says, could be the next big "unlock" worth over $3 trillion, improve credit access, and help formalise the rural economy.

Maximizing AI penetration would also push GDP growth from 6 percent to 8 percent and expand the economy to $8 trillion by 2035, Nilekani had said.

But what exactly is land tokenisation, and what does it mean for India?

And why some believe it might not be a good idea.

What is land tokenisation?

At its core, Nilekani’s idea is to assign each piece of land a digital token, securely recorded on a ledger such as a blockchain, allowing landowners to sell fractions of their land or raise loans against it.

“You can't sell it. You can't take a loan against it. It's like an asset which is there, but you can't do anything with it,” he said. “Tokenisation of land assets using a proper ledger and so on, can unlock these things.”

The approach, he added, draws from a broader vision he has co-authored in a paper on the ‘Internet of Assets’, a future where various asset classes become digitally tradable.

Also, read: Nandan Nilekani gives a glimpse of the next decade of India’s ‘Finternet’

For a country where a vast majority of landowners, especially in rural areas, struggle to access formal credit, tokenisation could act as a bridge.

Land record modernisation

But the Infosys Chairman also acknowledges that land is a state subject, and progress will depend heavily on state governments.

The move towards tokenisation will require states to overhaul their land records systems, digitising titles, improving registration infrastructure, updating property tax systems, and building reliable systems for surveying and mapping.

Some of this work is already underway.

The SVAMITVA scheme, for instance, has helped assign unique land parcel identification numbers (ULPINs) to properties in rural areas, with more than two crore property cards already issued.

States like Andhra Pradesh and Kerala have made progress in land surveys and mapping.

The Ministry of Rural Development is also pushing adoption of the National Generic Document Registration System (NGDRS) and the NAKSHA program, which aims to do for urban land records what SVAMITVA is doing for rural areas.

Yet the task is far from complete.

According to Udaya Kumar, Deputy Director General at the National Informatics Centre, land records in most parts of India still need basic upgrades, including geo-referencing of parcels and integration between land surveys, ownership records, and registration systems.

“Tokenisation may be the next step, but securing and updating land records is the first,” Kumar said. “Let us not jump the gun.”

Critics sounding the alarm

Beyond the technical challenges, there are social and economic risks that critics are flagging.

Zoho co-founder Sridhar Vembu has publicly warned that tokenisation risks financialising land in ways that could harm the very people it aims to help. He cautions that easy tradability could lead to distress sales or land fragmentation, especially in rural areas where financial literacy remains low.

“The assumption that every asset must be made liquid to be useful is seductive but flawed,” Vembu wrote in a post. Others worry that tokenisation might accelerate land concentration in the hands of institutional buyers or high-frequency traders, widening inequality instead of reducing it.

Set the ball rolling

For now, Nilekani’s pitch is more a vision than a policy directive.

No state has rolled out land tokenisation, and the legal frameworks to support such trading are still nascent.

However, Nilekani’s track record, building Aadhaar, UPI, and the broader digital public infrastructure stack, means his ideas are likely to be taken seriously in policymaking circles.

Also, read: Time to use direct benefit transfer infra for climate action payments: Nandan Nilekani