Baitulmal and Muslim Economy

Dear brother in faith Assalam o Alaikum!

Interestingly we try to follow Sunnah while we pray Salah, observe Fasting or recite the holy Quran, but what about Zakat? We know that Zakat is also an Islamic prayer and should be done only according to the teachings & practices of Islam, and not according to thought of any individual.  Let’s see what is there about Zakat in holy Quran.

As-Sadaqat (Zakat) are only for the Fuqara (poor), and Al-Masakin (the vulnerable) and those employed to administer (the funds); for those whose hearts have been (recently) reconciled (to Truth); for those in bondage and in debt; in the cause of Allah, and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom. (Al Quran 9:60)

Further it has been revealed that –

“Of their goods, take alms, that so thou mightest purify and sanctify them; and pray on their behalf. Verily thy prayers are a source of security for them: And Allah is One Who heareth and knoweth.” (Al Quran – 9:103)   

Both these verses of the holy Quran clearly indicates that Zakat would be collected from the richer and distributed among the poorer and vulnerable by an authority and not by any individual. The need of Zakat institution is very clear as the Zakat administrators are entitled for Zakat. It is ordained by Allah (ST) and not by any person. Prophet Muhammad (SAW) practically established the Baitulmal and administered. It was also followed by Sahaba Akraam during their khilafa. Hazrat Abu Bakr (RA) was specifically very strict about Zakat institution as it was very clear for him that negligence to Baiutulmal stands for negligence to Islam. Please read the following two Hadith about Zakat institution which reflects the importance of Baitulmal for Muslim community –

Abu Bakr's (RA) Daily Allowance from the Bait-ul Mal

Hazrat Abu Bakr (RA) was a cloth merchant and lived by that trade. On the death of the Prophet (SAW), people selected him as the Khalifah. Next day with some cloth hanging on his arms, he was proceeding to the market as usual when 'Umar (RA) met him on the way.

'Umar (RA): "Where are you going to, Abu Bakr (RA)?"

Abu Bakr (RA): "To the market".

'Umar (RA): "If you get busy with your trade, who will carry out the duties of the caliphate?"

Abu Bakr (RA): "How am I to feed my family then?"

'Umar (RA): "Let's go to Abu 'Ubaidah (RA) (In charge of Bait-ul-Mal), who will fix some daily allowance for you from the Bait-ul-Mal."

They both went to Abu 'Ubaidah (RA).

He fixed for Abu Bakr (RA) an allowance equal to that usually paid to an average Muhajir. Once Abu Bakr (RA)’s wife said to him:” I would like to have a sweet dish."

Abu Bakr (RA): "I have no money to arrange for the dish."

His wife: "If you permit, I shall try to save something daily from our allowance, which will some day make enough to enable us to prepare the sweet dish."

He agreed. A little money was saved in many days. When his wife brought him the money to make purchases for the sweet dish, he said:” It seems that we have received so much over and above our needs."

He deposited the saving in the Bait-ul-Mal and for the future got his allowance cut down by the amount saved by his wife.

Hazrat A'ishah (RA) narrates:

"When Abu Bakr (RA) was selected as Khalifah, he said to the people: 'You well know that I live by trade, and my income there from is sufficient to meet my expenses. Now I have to devote my full time to the affairs of the state and therefore my family allowance shall be paid from the 'Bait-ul-Mal."

The above Hadiths clearly reflects the significance of Baitulmal for community development. We just discuss about vulnerability of the community and crisis of leadership to resolve the problems, but we do not pay attention on institutional need for community development. Our individual approach and practices are weakening the community institutional and social resources. We have to understand the need and significance to provide institutional and social support like Baitulmal otherwise the community will be disintegrated and ruined.

War against those who deny paying Zakat to Baitulmal

Abu Hurairah (RA) is reported to have said: "when Allah's Messenger, (SAW), died and Abu Bakr (RA) succeeded him as caliph, some Arabs apostasized, causing Abu Bakr (RA) to declare war upon them. ’Umar (RA) said to him: 'Why must you fight these men?', especially when there is a ruling of the Prophet, (SAW): 'I have been called to fight men until they say that none has the right to be worshipped but Allah, and whoever said it has saved his life and property from me except when a right is due in them, and his account will be with Allah.' Abu Bakr (RA) replied: 'By Allah! I will fight those who differentiate between salah and Zakat because Zakat is the due on property. By Allah! If they withheld even a young she-goat (‘anaq) that they used to pay at the time of Allah's Messenger, (SAW), I would fight them.' Then 'Umar (RA) said: 'By Allah! It was He who gave Abu Bakr (RA) the true knowledge to fight, and later I came to know that he was right.' “The same hadith narrated by Muslim, Abu Dawud, and atTirmidhi has the following variant: "If they withheld the iqal, the rope of the camel," instead of "'anaq, young she-goat."

We should review our commitment to Islamic system. How much are we concern about absence of institution like Baitulmal in our lives? What we do to revive the Zakat System? What is the degree of intensity in our efforts as compare to Hazrat Abu Bakr (RA) in protecting the Zakat institutions? 

How good followers are we?

We might not be Hazarat Abu Bakr (RA), but at least we can follow the dearest follower of our beloved Prophet Muhammad (SAW) to some extent. Incidentally we are going against him. He was protecting the Baitulmal and announcing war against those Muslims who deny paying Zakat to Baitulmal, but in practice we pay our Zakat here and there instead of paying to Baitulmal and thus destroying the Zakat institution instead of protecting. Due to our perverted religious practices in socio – economic fields, we are rated as one of the most backward and deprived community. Despite being the second largest community of the nation, we have no respectable status as a community in India.    

After Sachar Committee Report hundreds of programs been organized to advocate the implementation of Sachar Committee recommendation, but the status of Muslims in India is going to be worse off even after those recommendations, unless we make change in community attitude. It is not the fascist or anti Muslims who deny our rights and privileges; but it is ordered by the Almighty for our perverted deeds which is going against Islam. We pay Zakat, but not according to Quran and Sunnah but as par our own wish, otherwise in India we should have a Baitulmal strongly enough to resolve community problems.

According to the Economics of development, every economy whether it is national, state or community based economy, it need following five resources for development –

a) Physical, b) Human, c) Institutional, d) Financial and e) Social resources.

As far physical resources are concerned, no human being is allowed to control that. But rest of the four resources is well under control of human being and we need its optimal utilization for community development. Baitulmal is an institution to protect and promote all these four resources, but we are not paying due attention over it as a result we have lost our social status, financial resources and decomposed human assets.

Because we are not concerned about Baitulmal we loose community financial resources, social power, institutional capacity and human assets. Our financial, social, institutional and human resources are being used by others and we remain downtrodden despite the fact that Muslim community is having enough resources. We have complains that political parties use our vote banks and are not loyal to us. This is in other terms exploitation of our social resources in absence of Ameer which cannot be protected without Baitulmal, otherwise Hazrat Umar (RA) would have allowed Hazrat Abu Bark (RA) to do trade instead of monthly stipend from Baitulmal. Similarly Muslim talents are being used by corporate, Multi nationals and Government in absence of Community socio-political institution. This is how community human assets are being exploited by others while poor talents are largely unemployed. Similarly we are loosing our awkaaf by state and central governments. This is exploitation of institutional resources of Indian Muslims. Precisely, in absence of Baitulmal, Indian Muslims loose their social, institutional, human and financial resources which are not allowing the community to improve its status.

The Sachar Committee Report suggests that Muslims have 7.6% share in number of saving deposit accounts in SCBs with 7.4% share in saving deposit amounts with SCBs in 2005. They had just 4.7% share in PSA outstanding amounts. Considering the same ratios of deposits and credits for Muslims in Aggregate deposits and Credits at SCBs in 2008, Indian Muslims would have following aggregate figures.

So according to above estimates, annual payable Zakat in India is approximately Rs. 3,139 crores as only 57% Muslim households are expected to have access to SCBs for deposits. Against this estimate of Zakat, there are approximately 5 crore Muslims (31% of Muslim population) are living below poverty line who need immediate assistance from Zakat Fund. We cannot change the fate of the community only through Zakat funds because Zakat per Muslims living below poverty line is under Rs. 650/- which is quite insufficient. And projecting all community development plans on Zakat is not rational. That’s the reason Indian Muslims consistently falling behind other communities. If Zakat is not sufficient to remove the poverty, what would be the source for funding community needs? We have to find the allocation and utilization of community financial resources to ensure best use of funds. If we analyze the financial flow of community resources, we may find that community is careless about protection and utilization of resources, though selfish and conscious about personal income / savings. This ignorance is pulling all water down out of tank so the community is always thirsty.

We see that total credits by SCBs is Rs. 23,61,914 which is 73.88% of Aggregate deposits, while total credits by SCBs to Indian Muslims is Rs. 1,11,010 crores against aggregate deposits worth Rs. 2,36,573 crores at SCBs. It means for Muslims the credit deposit ratio maintained by SCBs is 46.92% against overall credit deposit ratio of 73.88%. It reflects net loss of 26.96% credits worth Rs. 63,770.13 Crores for Muslims because as par general credit deposit ratio maintained by SCBs in 2008, Muslims should have got credit worth Rs. 1,74,780 crores while they got just Rs. 1,11,010 crores.

It reflects net annual loss worth over Rs. 63,770 crores for Indian Muslims in terms of credit from SCBs. If we distribute this amount among Muslim household living below poverty line, this stands for Rs. 86,118/- per household among 74,04,993 Muslim households living below poverty line, which might help to economically empower the poorest among us. 

It is not wise to keep loosing annual credits worth over Rs. 63,770 crores from SCBs and distributing Zakat worth Rs. 3,139 crores in unplanned manner. Unless we care protecting our financial resources through implying social and institutional resources, we may not be able to change the status of the community. We cannot blame the government and political parties or to SCBs for this discriminatory practice against Muslims because the Muslims themselves do not make attempt to resolve their problems.

Have we ever cared about reviving the Baitulmal which could well ensure protecting and optimizing the available resources for the Muslim Community? Islam through holy Quran and Sunnah provides the system to allow the community grows; but our passive approach and negligence toward revival of Baitulmal is creating all sort of problems for us. So, unless we intend to support the concept of Baiutulmal, we may not be able to change the condition of the poor and vulnerable Muslims. The community status will keep on declining and may fall below the poorest among all communities in India. By that time it would be too late to act because that extend of poverty will certainly reduce the level of faith among those poor and we might just loose brothers in faith despite our Zakat payments.

The community really needs sincere thought from Zakat payers about revival of Baitulmal so that the financial, human, institutional and physical resources of the community could be well protected and allow optimal utilization of available resources. This will not happen overnight, but a period is required to see the change. This change may begin from a positive though about Baitulmal by an individual Zakat payer who may convince to relatives, friends and neighbours. This may allow us to see Baitulmal at Mohall level. The group of Mohall level Baitulmal may be chained into City / Town and then District / state and may go up developing a national level Baitulmal.

AICMEU’s planned efforts to utilize Zakat funds

AICMEU established its Baitulmal Cooperative Credit Society Ltd in 1984 and Bait Al Zakat in 1989. The objectives were to utilize the savings of the community for interest free credits and optimal utilization of community zakat fund according to planned efforts because arbitrary use of zakat is wastage of community resources. By year 2000, AICMEU launched a movement in the name of Tehrik E Zakat, India. Alhamdolillah with efforts of last 20 yeras, today we have over as dozen of Zakat institutions in India working in different parts of India.

With regard to Baitulmal, we request you to kindly download membership forms of Tehrik E Zakat, India of strengthen our efforts which continued for a period of 25 years of dedication and devotion for the community. A brief report of AICMEU’s Bait Al Zakat and AICMEU’s Baitulmal is given as followings.

Performance of AICMEU’s Cooperative Credit Society Ltd.

As on 31^st March 2008, AICMEU’s Baitulmal Cooperative Credit Society maintained total deposit of Rs. 1,04,10,171 at 5,527 active deposit accounts for Saving (3,546), Current (51), Fixed (517), Recurring Investment (869) and Spot Collection Deposits (1,006) under thrift schemes of the society. During last 24 years of operation AICMEU’s Baitulmal has granted and paid interest free loans amounting to Rs. 12,44,71,291/- to 6520 members of the society.   As on 31^st March 2008, the society has total Rs. 93,34,198 as outstanding loans on 214 members of the society under Personal Loan (57), Loan against gold ornaments (147) and RID amounts (8), while other (02) members got lease finance.

Statement of Zakat Fund disbursed by AICMEU’s Bait Al Zakat

(During 1989 - 90 to 2007- 2008)

Disbursement of Zakat by AICMEU’s Bait Al Zakat

(During September 2007 to August 2008)

We further request you to visit our website for details about all beneficiaries’ names addresses and other details. Hope you would pay due attention and support to establish and strengthen Baitulmal. May Allah (ST) reward us suitably for our noble thoughts and deeds in terms of Barkaat and Falah in life hereafter! (Aameen)

Wasslam

Syed Zahid Ahmad

Asstt. Secretary General

Note: -

Ø       List of beneficiaries may be viewed here.

Ø       All donations will be exempted under section 80 G of Income Tax Act.

Ø       Kindly issue Cheque in favour of AICMEU’s Baitulmal Cooperative Credit Society Ltd.

Ø       Zakat Payers may kindly call Maulana Ishtiyaq Ahmad sb. or Br. Umer Farooque for Zakat collection during office hours at 2347 8329 / 2347 6497 and after office hours may call Dr. Abdul Mobin Khan on 9892 057 452 or Br. Syed Zahid Ahmad on 9869 814 113.

Ø       All queries related to membership form of Tehrik E Zakat be kindly refer to Maulana Shoeb Koti Sahab – Secretary Tehrik E Zakat, India on his cell number – 9324 926 919 during office hours. Similarly all questions regarding share application of AICMEU’s Baitulmal Cooperative Credit Society be kindly refer to either Br. Syed Zahid Ahmad on 9869 814 113 or to Br. Abdul Rasheed on his cell number – 9892 410 590 during office hours.