Poverty Alleviation

Islamic teachings provide different programmes of poverty alleviation and social security. Zakat is system of social security in Islam. Literal meaning of Zakat is purification and growth, it purifies wealth of the payer and also it causes to grow.

The Holy Qur’an says:

[box] “Take alms of their wealth wherewith thou mayst purify them and make them grow.”(9:103) Payment of Zakat is an essential component of faith: “But if they repent and establish worship and pay the poor-due, then they are your brethren in religion.” (9:11) “Successful indeed are the believers who are humble in their prayers and who shun vain conversation and who are payers of the Zakat.”(23:4)[/box]

Zakat is one of the five fundamental tenets of Islam and the most important part of Islamic fiscal system. State is duty bound to organize collection and disbursement of Zakat money. The Holy Qur’an says:

[box] “(Muslims are) those who, if we give them power in the land, establish the system of (Salah) prayers and (Zakat) poor dues and enjoin virtue and forbid evil and inequity.” (22:41)[/box]

Zakat is meant to create harmonious social order in which resource-less section of the society is ensured a honourable living. Zakat as a technical term signifies an obligatory transfer of a portion of wealth by a Muslim provided he is the owner of specific and prescribed amount called Nisab. Zakat is chargeable on different assets at different rates. It is chargeable at the rate of 2.5% on the assets of gold, silver, stock in trade, currency notes and other cash assets. On agricultural produce rate is 1/10, however if land is irrigated through artificial means 1/20 is charged. Animals are also subject to payment of Zakat according to their number. Zakat is payable once a year, for agricultural produce it is payable after every harvest season.

The Holy Qur’an provides eight heads of disbursement of Zakat fund.

i)                   Poor people without financial resources, those who do not have any kind of resources.

ii)                The needy, those who have resources but not sufficient to meet their basic needs of life.

iii)              Workers of Zakat department;

iv)              Those whose hearts are to be reconciled. Newly converted Muslims and non-Muslims who are inclined towards Islam. (they want to study Islam, and have a desire to know about tenets of Islam);

v)                 To free the captives. That is elimination of slavery in any form, as bonded labour, a kind of modern form of slavery in which poor labourers (including women and children) are kept in captivity till they discharge their financial liabilities created through advance payments made to them, by the owners of business or industry;

vi)              Poor facing debt liabilities and those facing financial burden caused due to natural disasters as heavy rains, fire and earthquakes, for their rehabilitation and subsistence;

vii)            The cause of Allah, for defence purposes; and

viii)         Payments to the wayfarers, not having enough amounts to reach the place of destination for their travel expenses.

For savings (cash assets) Nisab has been fixed at 200 dirhams (612.32 grams of silver), for gold at 20 mithqal (about 87 grams), for agricultural produce at 5 wasq (948 kg) (equal to five camel loads) and for animals at 40 goat, 30 cows and 5 camel. Assets less than Nisab limit are not liable to payment of Zakat. Household items as furniture and articles for personal use of the owner are not liable to payment of Zakat. Tools buildings, machines and facilities considered a component part of agriculture and industrial concerns are exempt from payment of Zakat.

Rate and other conditions of payment (i.e. once a year, 1/40 of savings) are highly equitable, in any way payments do not hurt the rich but its impact in alleviation of poverty is significant. Since it is a permanent and direct transfer of resources from rich to poor, incidence of poverty goes down rapidly. In the initial period of Muslim history when this system was introduced, results were marvelous. Within short period of time results were so encouraging that during the period of Umer II state officials used to make announcements in the streets looking for the needy to provide them assistance from Zakat fund, hardly few people were turning out who needed help from Zakat fund.

At present various Islamic states asSaudi Arabia,Sudan,Pakistan,Jordan,Libya,Kuwait,Malaysia,Indonesia,IranandBangladeshhave introduced Zakat system in their respective counties at the state level, catering for needs of the millions of deserving people. Incidence of poverty is quite visible in Muslim countries. It needs effective planning and management for the transfer of resources from rich to poor through mutual cooperation. It requires close relations between Zakat Departments of different countries. An inter-state organization for the management of Zakat fund and resource mobilization can play an important role to run programs of financial assistance for the Muslims world over.

[box] The Holy Prophet (Peace be upon him) said: When people stop paying Zakat they are punished with the calamities like drought and famine from Almighty Allah” (Tabari)[/box]

Financial assistance from Zakat fund is not provided as charity but as a right. Rich people in any case are not allowed to injure honour and dignity of the poor. The Holy Prophet (Peace be upon him) warned all those who humiliate or despise a believer, male or female for his poor financial position, will face the same fate on the Day of Judgment.