Haj Subsidy: Dispelling some misconceptions

                The Supreme Court has recently directed the Government to progressively reduce the Haj subsidy and completely eliminate it in the next ten years. Muslim clerics as well as MPs cutting across party lines have welcomed the apex court’s directive. In this context it is an opportune moment to objectively analyze the Haj subsidy issue, which has been an instrument of vote bank politics as well as Muslim bashing, and dispel certain misconceptions regarding the so called ‘Haj subsidy’.

Perspective of muslim scholars and leaders on the Haj Subsidy

                Haj is an annual pilgrimage undertaken by Muslims to the holy city of Makkah that is followed by ziyarat (visit) to the holy city of Madina. Islam mandates that Haj is obligatory on a Muslim only if he is physically and financially capable of performing the same.

As a corollary nobody, including the state, can fund or subsidize someone’s pilgrimage. Muslims had never asked for any such subsidy and time and again many Muslim leaders have asked for its roll back. In fact a working group of Muslim MPs headed by MP and former Dy. Chairman of Rajya Sabha K. Raham Khan has demanded the scrapping of the subsidy regime. Hence an overwhelming majority of Muslims today are in favour of doing away with it.

Eligibility for & Working of the Haj Subsidy

                India, which has the second highest Muslim population in the World, sends around 160000 Hajis to the annual pilgrimage. Out of these around 125000 Hajis i.e. 78 % travel on the Haj Committee of India’s quota while the rest i.e. 22% avail the services of private tour operators. It is only the former category of the Hajis that gets the benefit of the subsidy.

                Government of India subsidizes only the air fare of Hajis travelling on Haj Committee’s quota on Air India’s flights. All the remaining expenses are borne by the Haji himself. Thus it is not an all expenses paid trip for any interested Muslim as it is many times portrayed.

Constitutional Validity and Fiscal Burden

                The Supreme Court in a recent judgment while upholding the constitutional validity of the subsidy had observed that ‘many other purely religious events were financed by the state’.

Last year i.e. in 2011 the government spent around Rs 600 crore on Haj subsidy. There is no doubt that it is a big amount but won’t the total administrative expenditure spent on smooth functioning of various religious events & festivals held across the length and breadth of the country be much more than that? Many Muslim leaders have also argued that the Air India overcharges for the fare.  Rationalization in fares will reduce the amount considerably.

Subsidy for Hajis, or Air India?

                Furthermore since the contract for air travel is given to the financial crisis ridden Air India without any open tendering, the Haj Subsidy is in fact a subsidy to the ill Air India. All India Personal Law Board spokesperson Abdul Rahim Qureshi has opined that Air India charges exorbitant rates because of the monopoly it has been given. Hence subsidy acts like a discount on an over-priced ticket. Member of Parliament Asaduddin Owaisi said that “…under the garb of subsidy the money is going to Air India which is in deep crisis.” In spite of the huge revenue generated by ferrying Hajis the customer service provided by Air India has come under heavy criticism many times.

                Thus on one end of the political spectrum the Haj subsidy has been used as an instrument of vote bank politics while for the other end it has been an instrument for muslim bashing. All this while Muslims neither demanded nor desired the continuance of this system which hardly helped them.

Alternative to Subsidy regime  

A fixed and huge number of Hajis travelling in a limited span of time every year is surely a gold mine for any private airlines.  Hence the best alternative in short term is to scrap the subsidy and invite international open tenders so that competition and economy of scale ensure reduced prices as well as better customer services for hajis. A corporation may also be set up for implementing the same.

In the medium term, the Government must by a law set up a non-banking financial institution on the lines of Malaysia’s ‘Tabung Haji’ which is not merely a travel and Haj service. Its internationally renowned business model revolves around saving services based on Islamic principles that mobilize financial resources of Muslims for economic activities in the country and in return enable them to perform Haj pilgrimage without falling in a debt trap. On one hand it will give fillip to financial inclusion to one of the most financially excluded section of our society & at the same time with its long lock in period this model would be ideal for financing infrastructure projects which have long gestation periods. Considering India’s huge capital requirement for infrastructure it would be a win-win scenario.