By Syed Zahid Ahmad,
By 23rd July 2009, the Ministry of Minority Affairs has received proposals from 73 Minority Concentration Districts (MCD) under the Multi Sectoral Development Programme (MsDP). The plans of 59 districts have been approved. Rs. 388.66 crore has been released for 44 districts to the States / Union Territory concerned for implementation of various proposals approved for these districts. Considerably Indian Muslims are 69% of national minority population, but their share in selected 90 MCD for MsDP is just 30%. Is it anyway possible to achieve multi sectoral development unless we develop financial and social infrastructure for the community?
As there is a perception that the MsDP is an outcome of the recommendations made by the Sachar Committee to reduce the infrastructure deficits in Muslim concentrated districts; and because the allotted budget for MsDP is more than 50% (Rs. 889.5 crores out of Rs. 1,756 crores) in Ministry of Minority Affair’s annual budget for 2009-10, it is important to analyze the prospects of MsDP in improving the infrastructure facilities for minorities who constitute 19.47% of total population.
After analyzing the set programme and guidelines for preparation of MsDP for Minority Concentration Districts it is observed that 15 states and UTs are completely excluded from the MsDP for minorities.
The new list of selected 90 districts for MsDP covers just 37.90% Indian Muslims population. As much as 62.10% of Indian Muslims are completely deprived of MsDP because they don’t live in these districts. Only 29.25% Muslims living in rural areas of these districts are actually expected to get benefits of this MsDP because the plan aims to focus on rural and semi urban areas only. Though Indian Muslims share 69% in national minority population, they are just 30.38% of the total population in 90 districts selected for MsDP.
The selection criteria of districts may not be justified as it just counts literacy rate and work population ratio as parameters for socio-economic indicators and does not cover the parameters like per capita income or expenditure. There is lack of any standard index to evaluate the socio-economic status of selected districts. While the focus is upon creating physical infrastructure to improve linkages for economic opportunities, the important concepts of social and financial infrastructures are completely missing in the whole plan document. The optimal utilization of physical infrastructure and human resources if created through MsDP could not be optimized unless we include programs for improving the social and financial infrastructure of these selected 90 districts.
The Sachar Committee report has specifically made following recommendations about improving infrastructure in Muslim concentrated districts.
“While the number of service providers from the non-governmental organizations is on the rise, public provision of infrastructure remains critical and desirable. Sensitivity to the issues of different SRCs is very important to the delivery of services such as primary education, health, etc. Service providers face a number of difficulties in reaching out to the Muslim community for various reasons, ranging from a sheer lack of understanding of issues particular to the Community to lack of Muslim presence in the organization and a sense of suspicion which the Community may have towards them. It is alleged that in many situations, the service providers have inherent biases and show resistance to reach out to the Community. To correct this situation the committee suggested following measures –
*Credible NGOs, with necessary expertise, from the Muslim community are few and far between. These institutions, being closer to the community can indeed play an important role as intermediaries between policy programmes announced by the government and their beneficiaries within the Muslim community. Besides, there is need to encourage the setting up of civil society organizations from amongst the Muslim community as well. But once again, the reach of such organizations is going to be very limited and the responsibility of the State in providing basic health and other infrastructure facilities remains the main hope of all poor, including Muslims.
*Partnerships between the government, the community and the private sector may be quite useful to deal with problems faced by the Muslims. “
Though the set programme and guidelines for preparation of MsDP for Minority Concentration Districts has well mentioned that “the peoples’ participation and involvement of PRIs, NGOs and Self Help Groups should be ensured at every stage including plan formulation, implementation and monitoring”; there is no guidelines about empowering the NGOs through knowledge, training and capacity building. Without adequate investments in social resources to create better social infrastructure, the scope of utilizing physical infrastructure for betterment is not possible because unless social resources get refined, the human assets cannot capitalize the physical infrastructure. The role of NGOs and civil societies cannot be negated in socio-economic transition of any community.
Banking facilities are inversely correlated to the proportion of the Muslim population. The Sachar Committee has emphatically mentioned that –
“Lack of access to credit is a more serious problem for the Community as a significantly larger proportion of workers are engaged in self-employment, especially home-based work. Therefore, non availability of credit can have far-reaching implications for the socio-economic and educational status of the Community. “
Though the Sachar Committee had mentioned that Indian Muslims lack access to the credit system, it did not state that 29% credit loss to them is one of the main reasons for their economic backwardness. The high level committee as constituted by the Planning Commission of India for Financial Sector Reforms under the chairmanship of Prof. Raghuram Rajan has in fact noticed that lack of financial infrastructure for interest free banking and finance is an important factor for financial inclusion of Indian Muslims and thus made following significant recommendation.
“Another area that falls broadly in the ambit of financial infrastructure for inclusion is the provision of interest-free banking. Certain faiths prohibit the use of financial instruments that pay interest. The non-availability of interest-free banking products (where the return to the investor is tied to the bearing of risk, in accordance with the principles of that faith) results in some Indians, including those in the economically disadvantaged strata of society, not being able to access banking products and services due to reasons of faith. This non-availability also denies India access to substantial sources of savings from other countries in the region.
While interest-free banking is provided in a limited manner through NBFCs and cooperatives, the Committee recommends that measures be taken to permit the delivery of interest-free finance on a larger scale, including through the banking system. This is in consonance with the objectives of inclusion and growth through innovation. The Committee believes that it would be possible, through appropriate measures, to create a framework for such products without any adverse systemic risk impact.”
No one can assure any success in targeted economic growth if the economy lacks required financial infrastructure. For inclusive growth in India, there is an urgent need to arrest the financial exclusion of Indian Muslims by creating required financial infrastructure for interest free banking and finance. It would not only help us yield foster and inclusive growth, but also allow us mobilize huge investment funds for physical infrastructure without increasing the fiscal deficits.
If we really wish to see the MsDP a successful plan to remove the infrastructure deficits for Indian Muslims in minority concentrated districts, we need to consider the following facts under the MsDP.
The selection of the districts should be based on standard index for socio-economic indicators like Per capita income and per head asset or agricultural land per household etc.
Potential Muslim NGOs should be identified and empowered through knowledge, training and capacity building so as to enable them interact with district planning committees in formulizing and execution of the MsDP in selected 90 districts.
Creating financial infrastructure for interest free banking and finance so as to ensure financial inclusion of Indian Muslims for inclusive growth.
The nation cannot attain sustainable inclusive growth unless the due regulatory and policy initiatives are taken to allow Indian minorities grow naturally, not artificially by means of subsidies, grants and reservation in almost every aspect of life. To allow natural growth it is more important to remove the regulatory hurdles for development instead of providing aids, grants and subsidies as supplements. After 62 years of Independence we should now phase out the practice of Subsidizing because it does not lead to natural growth rather paralyses the entrepreneurship spirits.
It is expected that the Programme and guidelines for preparation of MsDP for the Minorities will be reviewed with an object to improve the potential of the programme in bridging the development deficits of Indian Muslims in Minority Concentrated Districts.
Important facts at a glance:
*By 23rd July 2009, the Ministry of Minority Affairs has received proposals from 73 Minority Concentration Districts (MCD) under the Multi Sectoral Development Programme (MsDP).
*The plans of 59 districts have been approved.
*Rs. 388.66 crore has been released for 44 of them
*Indian Muslims are 69% of national minority population, but their share in selected 90 MCD for MsDP is just 30%.
*15 states and UTs are completely excluded from the MsDP for minorities.
The list of selected 90 districts for MsDP covers just 37.90% Indian Muslims population.
*As much as 62.10% of Indian Muslims are completely deprived of MsDP because they don’t live in these districts.
*Only 29.25% Muslims living in rural areas of these districts are actually expected to get benefits of this MsDP because the plan aims to focus on rural and semi urban areas only.
*Though Indian Muslims share 69% in national minority population, they are just 30.38% of the total population in 90 districts selected for MsDP.
*The selection criteria of districts just counts literacy rate and work population ratio as parameters for socio-economic indicators and does not cover the parameters like per capita income or expenditure.
*The Sachar Committee report has specifically made following recommendations about improving infrastructure in Muslim concentrated districts:
o Credible NGOs, with necessary expertise, from the Muslim community are few and far between. These institutions, being closer to the community can indeed play an important role as intermediaries between policy programmes announced by the government and their beneficiaries within the Muslim community. Besides, there is need to encourage the setting up of civil society organizations from amongst the Muslim community as well. But once again, the reach of such organizations is going to be very limited and the responsibility of the State in providing basic health and other infrastructure facilities remains the main hope of all poor, including Muslims.
o Partnerships between the government, the community and the private sector may be quite useful to deal with problems faced by the Muslims. “