A concerned Indian Muslim brother once wrote: “the new Waqf Law should comply with the provisions of the Sharia law; but it should also take into account features from present day Economic system, so that centuries old archaic restrictions do not restrict use of Waqf property for the growth of the community; for instance development of modern Muslim higher education institutions, hospitals, etc. Genuine sharia throughout the 600 year Muslim rule has always been flexible and nuanced, not dogmatic.”
I cannot agree more. However, let us also take note of the fact that fiqhi rules pertaining to awqaf have undergone a revisit by contemporary scholars and academies. The flexibility that has been accorded by global bodies, such as, the OIC Islamic Fiqh Academy is perhaps more than adequate to undertake large-scale development of awqaf properties for education, health care and other social needs. In most countries, it is the absence of national laws while in others it is the inefficiency of national laws for awqaf that is responsible for the decline of this glorious institution.
We Indians are fortunate enough to have a dedicated and elaborate waqf law. However, this is both an inefficient and ineffective law. Much of the present war of words over finer points of the proposed amendments is going to enhance neither the efficiency nor the effectiveness of this law. It appears that discussions are focused either on non-issues, such as, apprehensions about possible flow of benefits to “other” communities, or issues of trust-deficit vis-a-vis the our own community leaders from religious, political, civil organizations. Clearly, such issues cannot be addressed by adding more provisions and thereby, increasing the complexity of the law. Increased complexity will only push a potential donor/waqif to consider alternative forms of non-profit organization, such as, trusts, foundations, societies that provide far greater operational flexibility and save costs.
In a democratic set-up, such as, India, one cannot overemphasize the role of healthy deliberations along the road to policy formulation. Indeed, a few Muslim organizations, such as, Zakat Foundation of India have done a great service by bringing the issues in public domain for discussion. (Read ZFI’s 20 point analysis of the issues here.) The exchange of views on the proposed regulatory changes has largely centred around Sachar Committee recomendations on waqf revival, recommendations of Joint Parliamentary Committee and reponses of the Ministry of Minority Affairs (Read the transcript of interview of Hon’ble Minister of Minority Affairs to Two Circles. Net here.)
It is not difficult to see that the discussions surrounding the proposed law give inadequate attention to the issue of waqf development by facilitating private financing. The doors to private participation have of course been silently opened by enhancing the maximum permissible lease
period from three to thirty years for provision of education and healthcare on a not-for-profit basis and to ten years for commercial use of the waqf asset. Indeed there are other robust fiqh-compliant models entailing partnership between waqf and for-profit financial institutions that have been implemented with success in various countries. There is no reason why these models that are rooted in private and community initiatives (with a minimal role for the government) cannot be replicated in India. This would provide a way for Indian Muslims to invest; to invest for halal
profits; and to invest for development of the community. The models and the enabling environment required for their implementation remain largely untouched by the proposed law.
While recovery, preservation and development of old awqaf is of extreme importance, the dynamic nature of the institution of waqf must be recognized. There must be a continuous flow of new awqaf if it has to play a meaningful role in the socio-economic uplift of the masses. One only has to look around and see how the newly elected government in Egypt has already embarked on a strategy for creating new awqaf. Egypt has old awqaf estimated at about half a trillion Egyptian pounds ($82 billion), but the yield on them was very low at about 1.5 billion pounds annually (apparently Indian awqaf fare worse; estimated at INR 1.63 billion on a total valuation of INR 1.2 trillion as per Sachar Committee). Lack of financial expertise with managers is identified as the major contributing factor and efforts are on to enhance the competency level of managers. However, more importantly, the policy makers have decided to bring in the sukuk that would encourage and enable the formation of waqf through multiple small subscriptions to public offer of sukuk, in contrast to the traditional method of waqf through a contribution from a single wealthy donor. The proceeds of the sukuk could then be used to purchase waqf assets. Doing a waqf would then be easy and convenient. Managing waqf too would be easy and flexible.
Mohammed Obaidullah | July 15, 2012