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Sunday, November 16, 2008

Why Hajj subsidy should be scrapped

I have been trying to write articles on different issues for a while, but it seems long periods of inactivity has badly harmed my already not so great writing skills. I find it so difficult to write these days that completing a few sentences becomes an ordeal.

Nevertheless, recently I was doing some research for sending my parents on Hajj pilgrimage. Though it didn't work out this year and they will inshallah perform Hajj in near future, To my surprise every search query on google resulted in at least a result or two on "so called huge Hajj subsidy" offered as what is know as "minority appeasement" of Indian muslims.

It was not the first time I was hearing about the Hajj subsidy issue, after all it is one of the more important grouse of right wing fundamentalist in India. But the fact that struck me was the most of the articles on Hajj Subsidy are from right wing fundamentalist web sites, claiming it as "Hindu Tax Payers Money" spent on "Minority Appeasement" and hardly any articles to counter their claims. The first thought that came to my mind after reading all these articles was that's loads of B*** ***T. On a more civilized note, these are preposterous claims made by uncouth individuals and organizations to spread religious enmity and disharmony in a secular nation.

The very statement "Hindu Tax payers money" is ludicrous. Is there only one community in India that pays taxes? Does the government compile data on how much tax was paid by which community and does it allocate funding for communities based on amounts of money contributed by each community? I know this particular paragraph is not the best form of counter argument against this issue, as I myself don't support these kind of subsidies. But sometimes when you are dealing with fanatics, every rhetoric needs to be answered.

As I have already said how difficult it has become these days to write a few sentences, I will not delve too much in to disproving these claims. But will quote some good articles by Mohib, Nimmy and Kashif.

Some quotes from Mohib's blog on Hajj Subsidy, Anyone?

First, let us analyze what exactly this so-called Haj subsidy entails. An Indian Muslim, who chooses to go to Haj through government run Haj committees, gets a subsidy of around Rs. 20,000 on their Air India ticket of Rs. 32,000. That is it ! The minimum cost of a Haj package through the Haj committees is around Rs. 92,000, of which Rs. 20,000 is paid by the Indian government to Air India as a subsidy on the Hajis ticket. The total Haj airline ticket subsidy was around Rs. 150 crore for the year 2001 and has been enmarked to Rs. 225 crores for the year 2005. It is interesting to note that the normal ticket to Saudi Arabia costs around Rs. 25,000 but Air India charges Rs. 34,000 from the Hajis. So, effectively the government is giving a subsidy of Rs. 12,000 only !
This is a slightly old post, but I am sure not too old to lose relevance. Adding some facts of my own, on an average a Hajj pilgrimage cost more than Rs 100,000. By Mohib's account the government is offering a subsidy of no more than 10-12%. I strongly believe that someone who can afford the so called "subsidized" can very much afford to pay for the rest of the money.

Mohib concludes with,

The bottomline is this, Indian Muslims should reject the subsidized Air India ticket, if not for anything else then for common sense only. Once the Haj market opens and this forced monopoly of Air India goes, I would not be surprised if other airlines start offering discounts to the Hajis. After all, which company wouldn’t want to tap in an yearly market in excess of Rs. 350 crores, and that too, just for the airfare.
Can it be said better then this? Leave it to the market forces dammit and I am sure the cost will go down rather then going up.

Nimmy's post is a more recent one, Why does Government push Hajj subsidy down the throats of Indian muslims?

What’s more, today, there are hundreds of tour operators who offer an all-inclusive Hajj tour package for the same amount without any subsidies whatsoever, and also earn a profit. Hajj Subsidy was given to those traveling through Hajj Committee. Every year Haj Committee sends around 60 to 70 thousand Indians to Hajj. Hajj Committee (by law) is forced to purchase these 60 to 70 thousand air tickets from Air India only.The Hajj subsidy was on these air ticket prices and hence was nothing but a discount on bulk air ticket purchases. But for political reasons it was given a name as a Subsidy and hence was meant to look like a favor on Indian Muslims.

The Hajj committee too needs to be reengineered.. We have lot of cozy fellows eating out poor man’s and government’s money.Maybe a transparent system of selection the committee members could be established..Recall a case against Hajj committee for fraud According to M Yunus, general secretary of the Tanzeem, “A return ticket to Jeddah costs Rs 21,000. But the Civil Aviation ministry, which booked the hajis on Air India charged them Rs 32,606. Of this, Rs 20,606 came from the Haj subsidy, the government provides. The ministry thus made a neat Rs 33 crore on 70,236 tickets it issued last year.’’. According to Rana Siddiqui, the petitioner’s lawyer, the Haj Committee also made Rs 28 crore on the foreign exchange it gives pilgrims.

Ok this says more or less what I have already said based on information from Mohib's blog. But read the complete article and specially the comments

Also check the Press Information Bureau in December 2006, Its difficult to get to the actual source since the PB site is practically useless.

A number of bloggers have mentioned that a Malaysian Organisation manages the affairs of Malaysian Hajj pilgrims with utmost efficiency and accountability, but none of them had actually mentioned any details. Some googling threw up the name Tabung Haji, check Tabung Haji - A Showcase of Modern Management

Their website is in a local language and the link to display the site in English fails, but google provided a direct link to the english section.

Please check the site of Tabung Haji for more information on how the organisation helps Malaysian Muslims in saving, financing and arranging their Hajj Pilgrimage.


Background of Tabung Haji

Last but not the least, how many of the people who actually avail of the subsidy have any idea that their visit is actually being subsidized?? Considering the general ignorance of the India populace, I am sure the figure will be in very low percentages.

Finally, I see a big business opportunities for the banking sector to make money from Hajj Pilgrimage. I will put the Hajj Pilgrims in two categories, the rich who can any day pay for the pilgrimage cost and the not so rich who save money through their life time to pay for their visit.

 Considering the fact that big banks are now opening up to the fact of Islamic Banking and offering products customized to needs of people. Some of the banks can launch a savings instrument where savers can deposit small sums over the years, just like a mutual fund SIP. Obviously they will have to promise that the money will be invested in sharia related projects else it cannot be used for Hajj.