Economic Policies

March 19, 2022


The economic arrangement that our rulers dreamed of for this country after independence was based on the principles and goals of self-reliance, socialism and poverty alleviation. For almost four decades, the overall course of policies remained the same, and in view of these, the Constitution of India was amended and socialism was incorporated into the basic ideology.

These policies prioritized the sluggish public sector, fueled the monster of corruption, promoted the license-permit raj and the process of wealth creation was slow. These policy shortcomings needed to be addressed, and economic reform was, of course, the need of the hour.

However, in the name of economic reform, the direction the country’s economic policies have taken from the 1990’s has created other more complex problems. The policies of globalization, liberalization and privatization have undoubtedly helped to create wealth. Today, not only is the country richer than ever before, but the growth rate of our GDP and the growth of the rich in the country is astounding. India has become part of the twenty biggest economies of the world called the G-20. If the government had carried out the reform process, resisting all kinds of pressures by protecting the interests of the poor of this country, this newly created wealth could have helped alleviate the poverty of the country. But the direction of the policies was such that it helped create wealth, but it could not be properly distributed. The policies only benefited the capitalists and a limited segment of the urban elite. The concentration of wealth increased and the poor became poorer and the rich became richer. The interests of the capitalists and elite foreign businessmen gained precedence over the interests of the poor. As a result, despite being one of the world’s leading countries in terms of economic growth and the number of super-rich, we have not been able to erase the stigma of being the country with the largest number of poorest people. This is creating a sense of deprivation in a large section of the people in the country and violent movements are also emerging

Jamaat-e-Islami Hind supports the policies of free trade according to the teachings of Islam. It does not consider the influx of foreign capital into the country as something wrong. It also supports the steps needed for the process of creation of wealth, safeguarding the legitimate interests of the capitalists and the industrialists and building their trust.

However, according to Jamaat-e-Islami Hind, all these goals should be subject to the welfare of the people of the country and the vital interests of the country and the people. In the field of economics, the role of the government is not merely that of a coordinator or a regulator. It is the foremost duty of the government to ensure the welfare of the people and cater to the basic needs of the poor. Similarly, it is the responsibility of the government for formulating policies that result in the equitable distribution of wealth and to ensure that the benefits of development reach the backward, the poor and those from rural areas. In order to achieve this, Jamaat-e-Islami Hind feels that the desired direction of our economic policies should consist of the following reforms:

  1. The government must recognize its role in the welfare of the country and must accept that recognize that the eradication of poverty, the welfare of the poor and their development is the constitutional and moral responsibility of the government, which it cannot ignore. It is the responsibility of the government to provide food, clothing, shelter, necessary medical care and education to every citizen. Moreover, it is one of the government’s basic responsibilities. Jamaat demands that moving beyond just the right to food; the cumulative needs of food, clothing, shelter, medical care and education – i.e. The ‘right to livelihood’ should be recognized as a fundamental right of the people of India through a constitutional amendment.
  2. The process of wealth creation is important, but the interests of the people of the country and the security and sovereignty of the country cannot be sacrificed for this purpose. Giving away important domains like education, defense and media to the foreign businesses only for the sake of raising capital is not in the interest of the nation. Similarly, in some industries and in retail it is important to regulate foreign investment in such a way that the interests of poor traders, rural farmers and small-scale industrialists are not harmed. The traditional sectors of the Indian economy should not be affected on which the livelihood of crores of the poor and the middle class are dependent. According to Jamaat, the forcible occupation of the land and resources of the poor for the sake of capitalists and the government’s tacit support in this oppression is tampering with the fundamental constitutional rights of the people of India. Effective legislation must be enacted to prevent this.
  3. The government should increase its expenditure in the social sector to achieve these goals. A large population of the poor and rapid economic growth, both mandate that our social spending be on par with that of the developed countries of the world and that we compete with them in this regard as well as economic growth rate. Policies such as reducing subsidies, reduced spending in social sectors and concentrating our resources only on industry-friendly domains such as infrastructure development should be discouraged.
  4. In order to provide the resources needed to spend on welfare; on the one hand, bold measures are needed to curb corruption, and on the other hand, it is important that the capitalists who benefit economically from this country be made partners in the development process of our poor and deprived. At present, the rate of direct taxation is quite low in our country and very low compared to other developed countries. The principle of higher taxes on higher income should be adopted. Direct taxes should be increased and indirect taxes should be reduced so that the burden of inflation does not fall on the poor.
  5. Along with the poor, the government needs to pay special attention to the social classes that have lagged behind other classes in the race for development for various social and political reasons. Increased special measures and special policies are needed for the welfare of Dalits and backward classes. Moreover, in order to improve the situation of minorities, especially Muslims, it is necessary to formulate concrete and effective policies instead of ostentatious and superficial measures. Sub-plans should be made for them under various social schemes and a reasonable budget should be set for their welfare instead of mere symbolic expenditure.
  6. According to the teachings of Jamaat-e-Islami Hind, interest and gambling are considered as the main causes of economic woes. Financial speculation should be discouraged. Lotteries, gambling and futures trading should be banned. Vicious rates of interest on home loans should be strictly curtailed, interest free banking should be permitted and our country should seriously consider the just Islamic economic system that is free from interest and gambling. These economic teachings also ensure the creation of wealth in a developing society like India and helps in its fair and equitable distribution and alleviation of poverty. The rationale of these principles of Islam has also become evident from the current global economic crisis. What is required is that these principles should be seriously considered and experiments based on Islamic principles of microfinance and banking should be encouraged
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