While financing the development of existing awqaf has been recognized in the proposed regulatory framework as a crucial issue that must be addressed, the modalities of financing receive scant attention and remain to be explicitly addressed. The framework calls for the establishment of a National Waqf Development Corporation. According to the Sachar Committee, “It appears to be essential to provide a technical advisory committee for development of Wakf properties both at the state and national levels. This body may comprise representatives of the State Wakf Boards, area experts from institutions such as School of Planning and Architecture, National Institute of Design and IITs and academics such as sociologists, economists, financial and legal experts. A representative from appropriate government department should also be part of this body.” It recommended further, “A National Wakf Development Corporation may be constituted by the central government with a revolving corpus fund of Rs 500 crores. It would also be advisable to seek out matching funds to be added to the corpus from the community and NGOs. The CMD of this corporation should be well versed in Muslim religious practices and be proficient in Urdu (?). The corporation may continue providing financial and technical help for development of Wakf properties with a view to enhance Wakf resources. Similar corporations should be established in all the states.”
The proposed legislation endorses the Sachar Committee recommendation and states: “The Central Government shall establish, as soon as possible, a National Wakf Properties Development Board, for the development of the Wakf properties in the country. The Central Government shall, as soon as possible, establish a National Board for promotion of education among Muslims and utilize the surplus funds of the Wakf institutions in the Country generated through the development of Wakf properties. Provided that the Central Government may frame rules for administration of these Boards as may be considered appropriate.” it also proposes that a National Wakf Development Corporation may be constituted by the Central Government with a revolving corpus fund of Rs.500 crores.”
A major change that is proposed in the proposed legislation that can potentially encourage private financing of awqaf development is the extension of maximum lease period from three years to thirty years, “provided that may be specified in the rules to be made by the Central Government; provided further that a lease or sublease exceeding ten years and up to thirty years may be made for education and health and for specific period as may be provided by the rules to be made by the Central Government; and provided that the Board shall immediately intimate the State Government regarding a lease or sub-lease for any period exceeding one year and exchange or mortgage of any waqf property and thereafter it may become effective after the expiry of forty-five days from the date on which the Board intimates the State Government.”
The most recent proposals regarding the regulatory framework in the run-up to enactment are contained in the Recommedations of the Select Committee of the Rajya Sabha. (http://ibfnet.blog/wp-content/uploads/2012/08/waqf-reco.pdf) These are well-considered recommendations. From the standpoint of financing, the relevant recommendation is the requirement that the leases of waqf assets must be priced at market rates (also recommended by earlier Joint Parliamentary Committee). The emphasis on the independence of the National Agency for Waqf Development from the National Minorities Development & Finance Corporation makes enormous sense as well. However, neither the basis of proposed corpus of Rs500 crores, nor the modes of financing have been the subject of discussion. Given the state of current property markets in India, it is anybody’s guess how many properties can be taken up for development at any time by the “revolving” waqf fund. Let us hope we are not going to witness a similar situation as the micro finance schemes of NMDFC where the size of loan has little relationship with the microenterprise to be funded and most certainly, little impact on the ground.
Mohammed Obaidullah | August 03, 2012