Q 1-Describe in details Islamic Economic System.
ISLAMIC ECONOMIC SYSTEM:
It is the system free from exploitation. It allows every person to earn his or her livelihood from legitimate sources and discourages concentration of wealth and extravagance.
CHARACTERISTICS OF ISLAMIC ECONOMIC SYSTEM:
- INDIVIDUAL FREEDOM:
Islam emphasizes human and individual freedom with tolerance. Unnecessary restrictions are discouraged. Every individual enjoys the right to work or do business. Business is disallowed only for prohibited goods and services. Islam guarantees all human rights
- BAIT UL MAL:
The religion recommends the establishment of the baitulmal, whose sources of income are as follows:
- RESTRICTIONS ON BAIT UL MAL:
Islam specifies and puts condition on the use of funds of baitulmal.
a- Its management and expenses should be with the advice and consoling of the people’s representative.
b- All expenses should be religiously and legally permissible
c- All the accounts must be maintained and audited
d- The people enjoy the right of access to these accounts.
- TRANSFER OF WEALTH:
Wealth is only transferable under the following conditions:
Work or business
Transfer by other means is disallowed. In other words bribery, interest, black marketing, profiteering, theft are all forbidden.
- LIMITED NATIONAL PROPERTY:
Islam doest not prohibits creating state property. The state, if need be can nationalize some necessary institutions or industries after paying their prices.
- REASONABLE PROFIT:
Our religion allows earning profit through legitimate business to a proper extent. Profiteering is in no case acceptable and has been prohibited, since it encourages concentration of wealth as a result of which the rich gets richer and poor gets poorer.
- TWO PARTY RIGHTS RECOGNIZED:
In any business or activity involved two parties. Buyer and seller, employer and employee, people and government, boss and subordinate, husband and wife, parents and children, are some of the example. Islam recognizes all rights and duties that must be recognized and practiced by all parties involved.
- DIGNITY OF LABOR:
The religion focuses due attention on labor. Every legitimate work is recognized and people are asked to do work to earn their livelihood. It loves laborers not beggars. In short, Islam is champion of dignity of labor.
- SOCIETY FREE OF EXPLOITATION:
Muslim religion has evolved such principles, laws, rules, codes, canons, edicts and decrees, that if truly exercised, can render the society free of exploitation.
By following the tenets of Islam the society can be remolded into utopia.
- PROHIBITITION OF GAMBLING:
Islam disallows gambling, speculations, bets and act of bookies. Unfortunately, capitalism, an economic system, stands on speculations the example of which are stock, cotton, and gold exchange.
- ILLICIT INCOME:
Islam has elaborated in detail all illicit incomes that a Muslim should avoid. Bribery, extortion, ransom, profiteering, interest, usury, and incomes from gambling, wine, pork business and casinos are all explicitly prohibited.
- DISCOURAGING WEALTH CONCERNTRATION:
Quran and Sunnah discard wealth concentration in any form, for it renders the rich become richer, and poor poorer.They encourage the circulation of wealth, the example of which are zakat, ushr, spending for the welfare of common man and society as a whole.
Zakat refers to a compulsory annual payment by those Muslims having wealth at least equivalent to worth 7.5 tola gold or 40 tola silver. The rate of zakat is two and a half percent of the property that must be paid to the poor annually..
Ushr refers to the tenth part which is payable on agriculture property by the zamindar.
- INTEREST FREE ECONOMY:
Islam does not allow interest. Interest is referred to as money paid for the use of money at a certain rate.
According to Islamic tenet, fitra should compulsorily be paid by every Muslim.
Irrespective of his or her age it should be paid once in a year on the occasion of Eid-ul-Fiter before Eid prayers. Its amount is 2.5 kilo of wheat or flour or its equivalent.