Chapter 17: Fundamentals of Islamic Economic System by Dr. Muhammad Sharif Chaudhry



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Fundamentals of Islamic Economic System

By Dr. Muhammad Sharif Chaudhry



  1. What is Welfare State?

  2. Islamic Concept of Welfare State

  3. Functions of Islamic Welfare State

  4. Islamic Welfare State Under the Prophet and His Successors

I- What is a Welfare State?

The idea of welfare state has become very popular in recent times so much so that every state now likes to call itself welfare state. Although welfare as a purpose of government is not an invention of this century, yet the term ‘welfare state’ came into wide spread use only after the Second World War.

The term ‘welfare state’ has not been clearly and exactly defined with the result that welfare programmes almost differ from country to country and place to place. However, generally understood meanings of this term are that it is a state in which the government assumes responsibility for minimum standards of living for every citizen. The term is broadly used to describe a society which possesses all or some of the following features:

1.       Provision of social security for all against accident, sickness, unemployment, old age and disability.

2.       Social justice or fair and equitable distribution of income and wealth among all citizens by minimising the gulf between the rich and the poor through effective use of taxation and public expenditure.

3.       Provision of free or heavily-subsidised services by the state in education and medical aid.

4.       The maintenance of full employment for the working force of the nation by making the state fully responsible for providing jobs to all able-bodied workers.

5.       Public ownership of utility services so that the same may be provided to low income groups at subsidised rates.

Modern states have taken several measures in order to achieve their goals of national welfare. The principles of mutual insurance have been adopted and schemes of social insurance have been introduced. The state has become an agency of administering social services and a helper of social welfare activities. The social welfare programmes generally provide family allowances, marriage grants, food rebates, school meals, grants or soft loans for purchasing houses, cars and household goods, medical aid, holiday allowances, free vacation, recreational allowances, special welfare schemes for women and children, etc.

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II- Islamic Concept of Welfare State

As stated earlier, the concept of welfare state is gaining ground rapidly in the modern world and over last few decades many states of the world have started one or the other type of welfare programmes and like to call themselves welfare states. However, their concept of welfare state is based either on the Marxian philosophy or on the principles of welfare economics of Professor Pigou. In both cases the emphasis is given on the material welfare of the people to the neglect of spiritual and moral one. But the Islamic concept of welfare state differs fundamentally from the prevailing notions. Because its concept is so comprehensive in nature that the Welfare State in Islam aims at achieving the total welfare of mankind of which economic welfare is merely a part. Equal stress on Zakat and Salat in the Qur’an is quite significant for proper understanding of the true nature of the Welfare State in Islam. The dynamic interplay of these spiritual and secular institutions in the Islamic society is symbolic of inner unity of Religion and Economics. Its social and economic effects are wholesome and the social pattern that emerges is free from the hideous tyrannies of capitalism and the coercive standardisation of the communistic society. It was this all-pervading social harmony that led H.G. Wells to remark : “Islam has created a society more free from widespread cruelty and social oppression than any society had ever been in the world before.” As a matter of fact, the Islamic concept of the Welfare State is based not only on the manifestation of economic values but also on moral and spiritual, social and political values of Islam.[1]

Islam, as universal religion of humanity, believes in the well-being of mankind in this world as well as in the next world. It aims at material as well as the spiritual welfare of its followers. The Quran, in one of its very popular prayers, teaches its believers to ask God : “Our Lord ! Give unto us in the world that which is good and in the Hereafter that which is good……..” (2 : 201). The primary objective of an Islamic state is, therefore, to establish an ideal society based on justice, equity and virtue. The Islamic state not only establishes the system of Allah’s worship (i.e., Salat or Prayer) but also establishes system of Zakat. Thus, both the spiritual and material well-being of the individuals is aimed at by the Islamic state. In other words, the Islamic state is a welfare state which performs a number of functions, in addition to the traditional functions of a state, for the socio-economic welfare of its citizens in this world and for their religio-spiritual welfare in the Hereafter. Its functions aimed at material welfare of its people include provision of basic necessities of life for all, ensuring of a comprehensive social security system, establishment of social justice, etc., whereas its functions for the spiritual well-being of its people include establishment of Islamic system of life for the Muslims and full religious freedom for the non-Muslims.

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III- Functions of Islamic Welfare State

For welfare of the people the Islamic Welfare State performs the following duties :-

1.       The duties of the Islamic state towards the poor and the needy and their share out of the revenues of the state is highlighted by the following verses of the Qur’an :

(i)   And know that whatever ye take as spoils of war, Lo! A fifth thereof is for Allah, and for the Messenger and for the kinsman (who hath need) and orphans and the needy and the wayfarer…..

-(8 : 41)

(ii)   The alms (Zakat) are only for the poor and the needy and those who collect them, and those whose hearts are to be reconciled and to free the captives and the debtors, and for the cause of Allah, and for the wayfarers;

-(9 : 60)

(iii)  That which Allah giveth as spoils unto His Messenger from the people of the townships, it is for Allah and His Messenger, and for the near of kin and the orphans and the needy and the wayfarer, that it become not a commodity between the rich among you………

-(59 : 7)

The duties of the Islamic state towards the poor and the needy and its status as their guardian has been further clarified by the Prophet of Islam as under :

(i)       Allah has made Zakat obligatory upon the Muslims. It is to be collected from the wealthy among you and distributed among the needy ones.


(ii)     The government is the guardian of anyone who has no other guardian.

-(Abu Daud, Tirmizi)

(iii)  When anyone dies in debt or leaves behind dependants unprovided for, the latter should come to me because I am their guardian (as head of state).

-(Bukhari, Muslim)

(iv)  If anybody dies while he owes a debt and does not leave behind any property for its payment then the responsibility for its payment is mine (as head of the state). But if anyone leaves any property behind, it is for his heirs.

-(Bukhari, Muslim)

(v)   If anyone leaves behind property, it will go to his heirs, but if anyone leaves behind some liabilities (instead), the burden of their responsibility falls on us (i.e., the State) :

-(Bukhari, Muslim)

The above mentioned verses of the Qur’an and sayings of Prophet Muhammad (PBUH) establish beyond any doubt that the responsibility of providing basic needs to its citizens lies on the Islamic state. In this matter, Islam has made no distinction between the Muslims and non-Muslims. Caliph Umar once found a Zimmi begging alms. He granted him pension and absolved him from payment of Jizyah. Khalid, the famous general of Islam, concluded a treaty with the non-Muslims of Hira which made a provision for financial assistance to the poor and destitutes of non-Muslims.

2.        The Holy Qur’an has referred to the basic human needs in these words : “There is therein (enough provision) for thee not to go hungry nor to go naked; nor to suffer from thirst, nor from the sun’s heat” (20 : 118-119). Thus basic human needs are : protection from hunger and thirst, protection from nakedness, and protection from sun’s heat which means shelter. In other words, food, clothing and house are the basic human needs which are the minimum requirement of a human being to lead his life in this world. The Prophet of Islam has also defined the minimum necessities of life in one of his oft-quoted traditions. He is reported to have said: “The son of man has no better right than that he would have a house wherein he may live, and a piece of cloth whereby he may hide his nakedness, and a piece of bread and some water”-(Tirmizi). From this tradition of the Prophet also, the barest necessities of human life include food and water, clothes and a house.

Every person living in the Islamic state is entitled to these basic needs, but if he is unable to procure them for himself or for his family then the Islamic state is duty bound to provide him the same. Many Muslim jurists have held that Islamic state is responsible to provide minimum standard of living, in the form of basic necessities of life, to all those persons who being poor, needy, sick, disabled, old or unemployed, are somehow unable to achieve the same. God has guaranteed sustenance to all His creatures on earth and the Islamic state being viceroy of God has its foremost duty to provide barest necessities of life to all of its citizens. Some of the very eminent jurists of Islam have held that the allegiance of the citizens to Islamic state depends upon the condition that the state would guarantee them basic necessities of life. But if the state fails to do so, then the state, according to them, forefeits its right to their allegiance.

Following persons are especially entitled to financial assistance from the state:

(1)     All poor persons who need help to pull on.

(2)     Incapacitated or physically disabled individuals who cannot earn.

(3)     Helpless persons like orphans, widows, old and unemployed.

(4)     Refugees or fugitives who are forced to leave their homeland and their belongings under oppression or persecution.

(5)     Students, teachers, preachers, etc. who have dedicated their lives for the cause of learning and propagation of Islam and thus have no time or means to earn for their subsistence.

(6)     Persons who are overtaken by some calamity like flood, earthquake, epidemic, war, cyclone, storm, etc.

(7)     All other helpless, destitute, distressed and needy persons, who are forced to begging in order to eat and cover their bodies.

An Islamic welfare state establishes an all-embracing social security system in its land for the deserving persons without any discrimination on any bias like religion, colour, language, race, place of birth, sex or blood-ties. This system of social security provides : maintenance allowances, family allowances, invalid allowances, widows allowances, orphans allowances, old age pensions, unemployment allowances, medical aid, etc. It also provides financial aid to the debtors in discharging their debt liability. It helps the prisoners and captives in provision of food and clothing. The social security scheme helps the travellers in the form of boarding and lodging facilities. The scheme is supposed to help the guarantors also who stand as surety for a debtor.

3.   The economic philosophy of an Islamic state is based on the concept of social justice. Allah has placed in the earth sustenance and provisions for all to cater their need. However, due to various reasons, the distribution of these provisions does not remain fair among all the human beings, thus making some fortunate people very rich who possess wealth more than their needs and making many others very poor who possess nothing or too little to meet their very basic necessities of life. An Islamic state provides equal opportunities to all its citizens to earn their livelihood. In order to achieve social justice, Islam takes two major steps: Firstly it discourages rather condemns concentration of wealth in few hands; secondly it ensures fair and equitable distribution of wealth through effective measures.

The Qur’an, the revealed book of Islam, condemns hoarding of gold and silver in very strong words in its verses 34 and 35 of its chapter 9, while concentration of wealth among the rich segment of society has been discouraged in verse No. 7 of Chapter 59 of the Holy book. To check concentration of wealth in few hands, unlawful and unfair means of acquiring wealth like interest, games of chance, bribery, business malpractices (such as short measuring, short weighing, etc). hoarding, embezzlement, theft and robbery, etc, have been strictly prohibited. Fair and equitable distribution of wealth has been ensured by Islam through Zakat and Sadaqat, through taxes and compulsory contributions levied by the Islamic state, and last of all through the laws of inheritance and will.

Thus, Islam, through its attack on concentration of wealth and through its measures taken for equitable distribution of wealth, has paved the way for establishment of socio-economic justice in an Islamic state. The gulf between the rich and the poor is narrowed and economic disparities are removed.

Muhammad Asad, while discussing the duties of the Islamic state with regard to economic security of its citizens, writes, : “It follows, therefore, that a state in order to be truly Islamic must arrange the affairs of the community in such a way that every individual, man and woman, shall enjoy that minimum of material well-being without which there can be no human dignity, no real freedom and, in the last resort, no spiritual progress. This, of course, does not mean that the state should, or ever could, ensure easy and carefree living to its citizens : it only means that in an Islamic state there shall be no soul-grinding poverty side by side with affluence; secondly, that all the resources of the state must be harnessed to the task of providing adequate means of livelihood for all its citizens; and, thirdly, that all the opportunities in this respect should be open to all citizens equally, and that no person should enjoy a high standard of living at the expense of other.”

Dilating on this theme further, he says: “But if the available resources of a community are so unevenly distributed that certain groups within it live in affluence while the majority of the people are forced to use up all their energies in search of their daily bread, poverty becomes the most dangerous enemy of spiritual progress, and occasionally drives whole community away from God-consciousness and into the arms of soul-destroying materialism. It is undoubtedly this that the prophet had in mind when he uttered the warning words: “Poverty may sometimes turn into disbelief (kufr).”[2]

4.   In order to achieve its ideal of socio-economic justice, Islam imposes social rights over individual wealth such as rights of the poor relatives for financial support, rights of the needy neighbors for assistance, rights of the slaves and servants for help, rights of the wayfarers, friends and general Muslims who need financial aid.

The Holy Qur’an says: “They ask thee, (O Muhammad), what they shall spend. Say : That which ye spend for good (must go) to parents and near kindred and orphans and the needy and the wayfarer. And whatsoever good ye do, Lo! Allah is aware of it”- (2 : 215).

Since the above mentioned social rights of others are to be fulfilled and payment of Zakat may not be sufficient for the same, the Prophet of Islam is reported to have said: “In one’s wealth there are other rights to besides Zakat”. Ali, the fourth caliph, said: “Allah has ordained that the rich are to pay out of their wealth to that extent which is sufficient for the needs of the poor; so that if they do not find food or clothing or struggle (unsuccessfully for their living), it would be because the rich are not doing their duty, and Allah will take them to task on the Day of Judgement and will punish them.”

Thus the followers of Islam are required to fulfil the needs of the poor and if Zakat revenues are insufficient, the Islamic welfare state can ask them to contribute more so that the needs of the poor can be met. Ibn Hazm, however, goes further to say: “It is obligatory on the wealthy of every city to provide for the needy and if the income from Zakat is not sufficient for this purpose, the Sultan can force them.”

The view of Abu Dhar Ghaffari, who was a very close companion of the Prophet, is that the rich should surrender all of their surplus wealth to the Muslim community or the state so that needs of the poor should be satisfied. According to him, no Muslim is entitled to keep wealth more than his needs when even a single Muslim remains hungry or naked in the country.

It would be of great academic interest if we reproduce an extract from Afzal-ur-Rahman’s book ‘Economic Doctrines of Islam’ in order to know the views of a great jurist like Ibn Hazm.

“As to the prohibition of keeping surpluses while fellow citizens are in dire need, Ibn Hazm quotes another saying of the Prophet related by “Whoever has an extra camel, let him give it to him who has it not and needs it; whoever has surplus food, let him give it to him who is without it.” The Prophet went on talking about parting with surpluses of various kinds until we came to believe that we are being taught that no one has any right to any surplus.”

Ibn Hazm then proceeds to deal with the question of the power of the state exercised in spreading out of the national wealth. He first deals with the right of the needy individual against another who has a surplus. He says that if a person is dying of thirst or hunger and the person possessing water and food refuses to help him, the hungry or the thirsty man has a right to take it by force. Most jurists before Ibn Hazm had mentioned only extreme thirst as a justification for individual violence. He criticises them and says that if thirst justifies it, why not starvation or lack of covering which might prove equally fatal.”

Abu Bakr, the first Caliph, fought war to crush those who would not pay Zakat meant for the poor. Ibn Hazm thinks that it justifies violence against those who withhold surpluses while poverty and misery still exists.”

5.   Islamic welfare state is also duty-bound to protect the weak against the strong. Abu Bakr the first caliph of Islamic state is reported to have said : “He that is weak among you is strong before me, in as much as I shall restore unto him his due, if it please God; and he that is strong among you is weak before me, in as much as I shall take that which is due from him, if it please God.”

So it is the responsibility of Islamic welfare state to protect the poor and the helpless from the economic exploitation of the rich and the strong. For this purpose many steps have been taken by Islam. Usury which is a strong instrument of human exploitation has been totally abolished. Unfair means to acquiring wealth and exploiting the weak such as bribery, usurping the wealth of orphans, gambling, speculative business, embezzlement, spurious weights and measures, fraudulent business practices have been banned in the Islamic state. Rights of the weak like orphans, women, slaves and servants, labourers and workers, tenants, consumers, etc., are also protected in the Islamic welfare state from the onslaught of the usurpers, oppressors, capitalists, feudal lords, industrialists, etc., as discussed in the previous chapter.

6.   Education and health play very vital role in the welfare of the individuals as well as in the development of a nation. So a welfare state in order to achieve its socio-economic goals cannot ignore these two sectors. Therefore, to provide education and healthcare to all of its citizens free or at heavily subsidized rates is one of the foremost duties of the Islamic welfare state. Islam’s emphasis on education can be understood from the very fact that the first verses of the Holy Qur’an which were revealed to Prophet  Muhammad (PBUH) laid stress on reading (Al-Quran 96 : 1-5). The Qur’an, in one of its very popular prayers, enjoins upon the Prophet of Islam to always pray to God thus : My Lord ! Increase me in knowledge” (20 : 114). The Prophet of Islam has made it obligatory upon every Muslim, whether male or female, to acquire education and knowledge. With this stress on education, the Prophet of Islam, as first head of the Islamic community and state, started educating and training his followers. Soon after his migration to Madinah, the Prophet ordered reservation of a part of his mosque for educational purposes. The place was called al-Suffah where elementary education in al-Quran was imported along with teaching the students how to read and write. After the Prophet, his successors known in history as right-guided caliphs, continued discharging this duty of the state to educate the people. Thus it has become one of the very important duties of the Islamic state to provide education to all its citizens.

The state is bound to impart education of the Qur’an and Hadith besides humanities, sciences and other technical subjects. It would establish schools, college, universities, etc., to provide free education to all of its citizens, male or female.

Islam also lays much stress on health and the Prophet of Islam has enjoined upon his followers to look after the sick. Providing healthcare and medical aid to the sick is thus another ownerous duty of the Islamic welfare state.

7.   The last, but not the least, important duty of the Islamic welfare state is to look after the spiritual welfare of its citizens. To discharge this duty, the Islam welfare state establishes the Islamic system of government as contained in the Qur’an and the Sunnah. Muslim citizens are enabled to lead their lives in accordance with the teachings of Islam; whereas non-Muslim citizens are provided with full religious freedom so that they may perform their religious practices in their places of worship without any restriction. The Islamic state is obliged to work for the spread of Islam because the salvation of humanity ultimately lies in Islam. But this is done through preaching and persuation and not through coercive measures or exercise of pressure as forcible conversion has been strictly prohibited by Islam.

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IV- Islamic Welfare State under the Prophet and His Successors

1.       The Prophet of Islam, Hadrat Muhammad (May Allah’s peace be upon him) migrated from Makkah and settled at Madinah in the year 622 A.D. Soon after he concluded a three-party pact comprising Muhajirin (Muslims who had migrated with him), Ansar (Muslims of Madinah who had welcomed him) and Jews of Madinah. This pact came to be known in history as Charter of Madinah which laid down the foundations of a small Islamic state at Madinah headed by the Prophet himself. The income of public treasury of this tiny state was too small to undertake work of social security and public relief at a large scale. Moreover the state was always engaged in warfare as its security was constantly in danger due to frequent invasions of Quresh of Makkah and intrigues of Jews of Madinah.

      Initially the only source of income of the state was Zakat. Later on spoils of war augmented the government resources, as four-fifth of it was distributed among the fighting soldiers and one-fifth was taken for the public treasury for the cause of the poor. Out of these available revenues, the Holy Prophet always provided financial assistance to the needy and the poor, and monetary help to those who were sick, invalid and hence unable to earn. He also helped those who were unemployed either in the shape of monetary assistance or in getting employment. When the position of public revenue improved during later part of his reign, he started paying off the debts of those poor Muslims who were unable to repay the same or who died leaving behind no property to clear their debts. Thus the Holy Prophet established a sort of social security system whereby the Islamic state could provide at least basic human needs to all those members of the community who were otherwise unable to provide the same for themselves and for their families.

2.       Abu Baker, who succeeded the Prophet of Islam, strictly followed the policy initiated by the Prophet regarding financial assistance to the poor and the needy. He declared war on those who had refused to pay Zakat, because the Zakat was the share of the poor and the destitute in the wealth of the rich and well-to-do. In the distribution of funds among the eligible persons, Abu Bakr followed in the footsteps of the Holy Prophet and gave equal share to each without making any distinction. When some companions insisted that the earliest Muslims should be given preference and paid higher allowances than the later converts, Abu Bakr rejected their plea saying : “I am fully conscious of the superiority and excellence of the people you have mentioned; but it is a thing which will be rewarded by God. But here is a matter of livelihood, where equality is better than the principle of preference”. During his reign a regular Bait-ul-Mal on permanent footing was established and its income increased considerably due to accession of some conquered countries to the Islamic state. So the state assistance to the poor and the needy also substantially increased.

3.       Umar the second caliph of Islam, who succeeded Abu Bakr, established a full-fledged and an all-embracing system of social security and public maintenance as the revenues of the Bait-ul-Mal substantially increased due to conquest of many rich countries of Iranian and Roman empires like Iraq, Syria, Iran, Egypt, Palestine, etc. So it was during his time that an ideal welfare state of Islam with large scale system of public maintenance and social justice was established which guaranteed fair and equitable distribution of wealth and minimum but reasonable standard of living for all citizens. Different departments were created for distribution of grants and allowances among the people and registers were maintained for this purpose.

Imam Abu Yusuf, in his book Kitab-ul-Kharaj, gives a detailed account of grants and allowances given by Caliph Umar to various classes of persons.[3] He states :

      “When God extended the conquests during the Caliphate of Umar, and the Persians and the Romans were defeated, he called, the Advisory Council of the companions of the Holy Prophet and said, “I have decided to keep wealth in Bait-ul-Mal (the state treasury), for it will be useful for paying annual grants to the people, I want to know your opinion. The companions replied, “Do as you think proper for the hand of God is with you”. Then Umar fixed grants for various categories of people and called for the preparation of registers to make the necessary entries therein. Then Umar enquired whose names should be written first in the register. Abdur Rahman bin Auf replied, “Start with your own name”. Umar said, “By God ! I can do this but I will start with Banu Hashim, the family of the Holy Prophet”.

Further elaborating this system of grants and allowances, Abu Yusaf writes that Zaid reported from his father who heard Umar bin Khattab saying that : “I swear by God without Whom there is no god, that there is not a single individual who has not got a right in this wealth (received from people) even though in practice he may get it or not. And no individual has more right in it than any other except a slave. My position in this respect is like anyone of you, and our grades will be determined in the light of the Book of God and association with the Holy Prophet. All the trials through which a person has gone and the lead he has taken in accepting Islam will be taken into account. By God ! If I live even a shepherd in the hills of Sana will get his share from this wealth at his own place.”

“He fixed an allowance of 5,000 dirhams per annum for any one who had fought in the battle of Badr, and for all others whose Islam was of the same degree as those who had fought at Badr, e.g., who had migrated to Abyssinia, or fought at the battle of Uhad were given 4,000 dirhams per annum; children of those who had fought at Badr received 1,000 dirhams, but Hassan and Hussain for their relation with the Holy Prophet received the same amount of allowance as their fathers, i.e., 5,000 dirhams each. Every one who had migrated before the conquest of Mecca was given an annual allowance of 3,000 dirhams; and those who embraced Islam at the conquest of Mecca were given 2,000 dirhams each and young children of Muhajirin and Ansar also received the same amount of allowance”.

“In the determination of allowances for common people, he took into account their position, knowledge of the Holy Quran and struggle in the Way of Gad (Jehad). All others were placed on equal footing; grants of 2,100, 1,000, 900, 500 and 300 dirhams were fixed for the people of Yemen but no one received less than 300 dirhams per annum. Umar also said that if more wealth was received, he would increase the allowances and fixed 4,000 dirhams for everyone, 1,000 for his journey, 1,000 for arms, 1,000 for his family expenses and 1,000 for his horse or pony”.

Every Muhajir on the average was paid 5,000 dirhams, every Ansar 3000 dirhams and wives of the Holy Prophet at the rate of 12,000 dirhams each per annum. But Umar did not always follow very strictly the rules which he had laid down in determining the allowances. In certain cases it was not considered essential to follow those rules and some individuals were given higher allowances than other people of the same status. Umar Ibn Abi Salma, who was the son of Ummul Mumineen, Um-e-Salma, was given 4,000 dirhams. When Muhammad bin Abdullah Ibn Jahsh objected, Umar replied that he was giving him more because of the place in which he was held by the Holy Prophet, and the one who was objecting should bring a mother like Um-e-Salma and then he would accept it. He also fixed 4000 dirhams for Ussama bin Zaid, at this Abdullah bin Umar said that he had fixed 3000 dirhams for him and 4,000 dirhams for Ussama, even though he had fought in many battles in which Ussama could not participate. Umar replied that he had given him more for he was dearer to the Holy Prophet than him and his father was also dearer to him than his father.

Umar fixed 1,000 dirhams for Asma bint Umais, wife of Abu Bakr, Um-e-Kulsum bint Uqbah and the mother of Abdullah bin Masuad.”

The Islamic state under Umar also supported the poor and needy from its non-Muslim citizens in providing their basic needs and remitted their taxes like Jizyah, We have already mentioned how caliph Umar remitted Jizyah and gave financial assistance to a blind old non-Muslim whom he found begging. The great caliph by exercise of Ijtihad, included poor non-Muslims among the ‘Masakin’ who are entitled to Sadaqat as prescribed in verse 60 of chapter 9 of the Holy Qur’an. He thereafter issued a standing order to the concerned departments to provide regular allowances out of Bait-ul-Mal to those non-Muslim citizens who were needy and destitutes. Collection of Jizyah from such persons was also strictly forbidden.

Besides providing the above mentioned grants and allowances, Umar made it sure that no one was left hungry, naked or shelterless in the Islamic state. He made necessary arrangements that every needy, invalid, sick, old, orphan, widow, and unemployed was provided adequate subsistence from the Bait-ul-Mal. Allowances for new-born babies were fixed and families of the Mujahideen (Muslim warriors) were properly looked after. Travellers were assisted, they were provided free food and lodging and guest houses were built for them at various places.

4.       Usman, the third caliph of Islam, who succeeded Umar, continued the system of public maintenance established by his great predecessor-in-office. Ali, the fourth caliph, reversed the principle of preference in the matter of grants and adopted Abu Bakr’s principle of equality. On the whole the Islamic Welfare state under these two caliphs maintained its welfare activities and continued providing regular grants and allowances to various classes of recepients.

With the death of Ali, the pious caliphate came to an end and so did the welfare state, except its revival for a shorter period under Umar-bin-Abdul Aziz.

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[1].  M. A. Mannan: Islamic Economics - Theory and Practice.

[2].  State and Government in Islam.

[3].  Quoted by Afzal-ur-Rahman.

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