How Not to Do Minority Welfare
While the union budget for 2009-10 raised the allocation for minority welfare, the funds remain a pittance compared to the extent of backwardness and discrimination faced by the minorities. Further, political disinterest and ingrained prejudices in sections of the bureaucracy often lead to diversion of funds and unspent amounts. The government needs to show greater political will while citizens need to monitor these schemes at the grass roots. Otherwise these schemes will remain crumbs thrown at a hapless section of India’s citizens.
In the budget for the 2009-10 financial year, the government of India has allocated Rs 1,740 crore to the Ministry of Minority Affairs, a whopping 74% increase from the pervious year’s allocation of Rs 1,000 crore. But before one yells “minority appeasement”, consider that this amount, earmarked for the welfare of about 20% of the nation’s population is just 17% of the total budget. The National Minorities Commission Act, 1992 has notified who comprise the minority communities of India. Muslims are 73% of the minority population, while Christians, Sikhs, Buddhists, Parsis and others make up the rest. Therefore, a majority of the welfare schemes for minorities are designed keeping in mind the educational and economic needs of the Muslim communities.
Combining the outlays to the Ministry of Minority Affairs, the assets of the Maulana Azad Education Foundation and the National Minority Development Finance Corporation (NMDFC), the central government spends about Rs 5,000 crore annually on welfare of Muslims. Now let us take this amount of Rs 5,000 crore and divide that by the estimated Muslim population in India, which is about 15 crore. What we get is a paltry sum of Rs 333 per capita. Even if the top 20% of the Muslim population by income is considered rich enough to not require support, we get the figure of Rs 417 per head being allocated by the government. If this amount is spent properly it would lead to some benefit to the community. But government schemes designed for minorities are rarely implemented with any sincerity and often funds meant for minorities are diverted.
Sabotaging Minority Schemes
A few examples from Assam would illustrate the manner in which money allocated to minority welfare is diverted to areas and projects that will not directly benefit the minorities. In Chamguri, Nagaon district which has only 4% minority population Rs 6.5 crore was allocated for the construction of a 100 bed hospital, while Rs 50 lakh was allocated for Kaliabor College, in an area which has only about 19% minority students. Similarly, Rs 4 crore was allocated for an Industrial Training Institute in Nagaon which has 10% minority students and which was already getting funded under a World Bank scheme.
This diversion of funds is possible because the minority affairs ministry itself makes it possible. For instance, in a letter dated 26 December 2008, an undersecretary at the ministry notifies the sanctioning of an amount of Rs 63 crore for Barpeta district of Assam. The letter directs the accounts officer under the ministry to release Rs 31 crore under various schemes meant for the minorities in Barpeta. Copies of this letter are sent to the concerned departments of the Assam government. For each of the projects that are sanctioned, the ministry issues instructions for the state government. This is where it gets interesting and shows what mechanisms exist for legally diverting funds away from the minorities.
For the housing scheme titled Indira Awas Yojana, the ministry directs “the State will ensure that 20 below poverty line(BPL) families per village in 50 villages per block having the highest proportion of minority population would be selected.” So, a “creative” administrator can easily identify villages and families with nonminority population as long as the block itself has a high number of minority populations. If there is any confusion, a second guideline gives such “creativity” the legal cover it requires. It states that the “BPL families figuring in the wait list, even if they belong to communities other than the minority communities, would be selected in the order of their ranking in the list”.
In other words, funds allocated for minorities are released by the Ministry of Minority Affairs with instructions that it can and should be spent on non-minorities on the basis of some other wait list that has nothing to do with the ministry itself. This clearly seems to be against the government’s own “Guidelines for Preparation of Multi-Sectoral District Development Plans for Minority Concentration Districts” where Clause 7.1 (iii) reads:
“…the funds provided for the minority concentration districts are additional resources for these districts do not substitute state government funds already flowing to the districts”.
Of course, this instruction is not unique to Barpeta. Similar instructions have accompanied all the grant-in aids released by the minority affairs ministry for 2008- 09. All the local administrators have to show that the block or village they have selected has a sizeable minority population. Yet the building of schools, toilets, aangan-wadi resources and water handpumps may not actually end up benefiting the minorities at all.
Low Credit Flow
The NMDFC, set up in 1994, focuses on the economic development of minorities. It provides funds to minorities for self-employment and education, among other things. With a share capital of Rs 850 crore, it has the power to engender positive changes among the discriminated minorities, especially Muslims, by increasing entrepreneurship through targeted loan schemes.
Unfortunately, it has been able to raise only Rs 676 crore out of its total promised capital of Rs 850 crore. Sixtyfive per cent of the share capital is the government of India’s responsibility, 26% the contribution of state governments and union territories and 9% is supposed to be contributed by organisations and individuals interested in minorities’ welfare. While the government of India has met 98% of its contribution promise, only 59% of the state government contributions are in. The most pathetic aspect is that out of the Rs 76.50 crore expected contributions from organisations and individuals, only Rs 1 lakh has been raised thus far. Among the states, only Delhi, Himachal Pradesh, and West Bengal have paid 100% of their contributions. Some of the worst offenders are Punjab which has paid only 20% of its promised contribution, Tamil Nadu with only 35% paid up and Uttar Pradesh, which has paid up a measly 19% of its promised contribution.
Even this Rs 676 crore could have an impact for the better for the minorities if their schemes are properly implemented, but this seems hardly to be the case. The NMDFC depends on the state channelizing agencies (SCAs) which are nominated by the state governments. Having to work through SCAs impacts the effectiveness of the NMDFC’s programmes. It also has a network of about 200 non-governmental organisations (NGOs) throughout India to
reach its intended populations. Ninetysix per cent of the funds disbursed by NMDFC is through the term loan scheme which makes available a loan of up to Rs 5 lakh. The corporation annually disburses, on an average, Rs 10 crore under this scheme. Over the past five years it has benefited 1,47,820 people distributing a total of Rs 57 crore. The microfinance scheme of the corporation has distributed a further Rs 6 crore, benefiting 79,781 people in the last five years.
The Ranganath Misra Commission report had this to say about the NMDFC:
…the total flow of credit from the NMDFC, in comparison to other financial institutions, is extremely small. This limits the impact of NMDFC assistance on the economic progress of minorities. Moreover, obtaining a guarantee from the state government remains the biggest hurdle to getting a loan from the NMDFC. Also, due to financial constraints, the state governments are reluctant to guarantee loans.
Hostages to the SCAs, both these flagship schemes – term loan scheme and microfinance scheme – have been implemented erratically. Out of 27 states and union territories that participated in the term loan scheme, only Kerala shows some consistency in distributing money under this scheme. Figures for all the other states show inconsistency of participation. Sixteen states have zero distribution in one or more years. Bihar, for example, distributed Rs 8 crore in 2004-05, nothing in 2005-06, and Rs 3 crore in 2006-07. Another example is Uttar Pradesh, which has not distributed any money since 2006-07! Similar is the case with NMDFC’s microfinance scheme. Nineteen states had one or more years of no disbursement at all. Clearly, since the success of the corporation’s schemes is dependent on the cooperation of the state mechanisms and the NGOs, the NMDFC does its part to keep them happy.
The NMDFC pays the SCAs Rs 1 crore in the name of infrastructure development and, in addition it also pays 1% extra interest to SCAs for the loans disbursed. Over Rs 40 lakh was given in interest-free loans in 2006-07 to NGOs. All this money is meant for the SCAs and not for the minorities. The NGOs also get financial support to help recover the loans they give out but recovery has been only around 57%. The problem with these NGOs is not only poor performance. The NMDFC has been forced to take legal action against some of these NGOs for clear unlawful practices. A total of 51 NGOs are facing legal suits by the corporation to recover more than Rs 1.8 crore.
The Minority Affairs Ministry has three types of scholarships for minority students, pre-matric, post-matric and meritcum-means. About six lakh students are to benefit from these scholarships every year. But just like other schemes of the government, it has not been easy for the intended beneficiaries to access these scholarships. The application is six pages long and available only in English. The scholarship application also requires six additional documents, two on official stamp paper. Many poor and deserving students are unlikely to have the resources and expertise necessary to correctly deal with all this cumbersome paperwork. A number of students who did qualify complained of not getting the money that was promised to them.
Solutions
The solution to all these problems is not to have another commission to investigate matters. The solution is also not in promulgating other schemes and programmes. The first thing the government must do is to constitute a joint parliamentary committee to monitor the implementation of these and other schemes meant for the welfare of the minorities. Second, there need to be sustained awareness campaigns among the Muslims, and minorities in general, to help them know about and correctly identify relevant government schemes and also their rights and duties as citizen of India.
Muslims can raise funds, establish schools and colleges, and organise selfhelp groups but all these efforts together cannot match the funds required to meet the needs of the community over the entire length and breadth of India. It is therefore necessary that the government fulfil its promises towards minority development and Muslim groups need to monitor these schemes at the grass root level to ensure proper implementation. There are many other solutions too but, finally, it all depends on how sincere the governments at the states and centre are towards minority welfare.
Published: september 5, 2009 vol xliv no 36 EPW Economic & P 20 olitical Weekly
A version of it published in Muslim India 305, Nov 2009.
In the budget for the 2009-10 financial year, the government of India has allocated Rs 1,740 crore to the Ministry of Minority Affairs, a whopping 74% increase from the pervious year’s allocation of Rs 1,000 crore. But before one yells “minority appeasement”, consider that this amount, earmarked for the welfare of about 20% of the nation’s population is just 17% of the total budget. The National Minorities Commission Act, 1992 has notified who comprise the minority communities of India. Muslims are 73% of the minority population, while Christians, Sikhs, Buddhists, Parsis and others make up the rest. Therefore, a majority of the welfare schemes for minorities are designed keeping in mind the educational and economic needs of the Muslim communities.
Combining the outlays to the Ministry of Minority Affairs, the assets of the Maulana Azad Education Foundation and the National Minority Development Finance Corporation (NMDFC), the central government spends about Rs 5,000 crore annually on welfare of Muslims. Now let us take this amount of Rs 5,000 crore and divide that by the estimated Muslim population in India, which is about 15 crore. What we get is a paltry sum of Rs 333 per capita. Even if the top 20% of the Muslim population by income is considered rich enough to not require support, we get the figure of Rs 417 per head being allocated by the government. If this amount is spent properly it would lead to some benefit to the community. But government schemes designed for minorities are rarely implemented with any sincerity and often funds meant for minorities are diverted.
Sabotaging Minority Schemes
A few examples from Assam would illustrate the manner in which money allocated to minority welfare is diverted to areas and projects that will not directly benefit the minorities. In Chamguri, Nagaon district which has only 4% minority population Rs 6.5 crore was allocated for the construction of a 100 bed hospital, while Rs 50 lakh was allocated for Kaliabor College, in an area which has only about 19% minority students. Similarly, Rs 4 crore was allocated for an Industrial Training Institute in Nagaon which has 10% minority students and which was already getting funded under a World Bank scheme.
This diversion of funds is possible because the minority affairs ministry itself makes it possible. For instance, in a letter dated 26 December 2008, an undersecretary at the ministry notifies the sanctioning of an amount of Rs 63 crore for Barpeta district of Assam. The letter directs the accounts officer under the ministry to release Rs 31 crore under various schemes meant for the minorities in Barpeta. Copies of this letter are sent to the concerned departments of the Assam government. For each of the projects that are sanctioned, the ministry issues instructions for the state government. This is where it gets interesting and shows what mechanisms exist for legally diverting funds away from the minorities.
For the housing scheme titled Indira Awas Yojana, the ministry directs “the State will ensure that 20 below poverty line(BPL) families per village in 50 villages per block having the highest proportion of minority population would be selected.” So, a “creative” administrator can easily identify villages and families with nonminority population as long as the block itself has a high number of minority populations. If there is any confusion, a second guideline gives such “creativity” the legal cover it requires. It states that the “BPL families figuring in the wait list, even if they belong to communities other than the minority communities, would be selected in the order of their ranking in the list”.
In other words, funds allocated for minorities are released by the Ministry of Minority Affairs with instructions that it can and should be spent on non-minorities on the basis of some other wait list that has nothing to do with the ministry itself. This clearly seems to be against the government’s own “Guidelines for Preparation of Multi-Sectoral District Development Plans for Minority Concentration Districts” where Clause 7.1 (iii) reads:
“…the funds provided for the minority concentration districts are additional resources for these districts do not substitute state government funds already flowing to the districts”.
Of course, this instruction is not unique to Barpeta. Similar instructions have accompanied all the grant-in aids released by the minority affairs ministry for 2008- 09. All the local administrators have to show that the block or village they have selected has a sizeable minority population. Yet the building of schools, toilets, aangan-wadi resources and water handpumps may not actually end up benefiting the minorities at all.
Low Credit Flow
The NMDFC, set up in 1994, focuses on the economic development of minorities. It provides funds to minorities for self-employment and education, among other things. With a share capital of Rs 850 crore, it has the power to engender positive changes among the discriminated minorities, especially Muslims, by increasing entrepreneurship through targeted loan schemes.
Unfortunately, it has been able to raise only Rs 676 crore out of its total promised capital of Rs 850 crore. Sixtyfive per cent of the share capital is the government of India’s responsibility, 26% the contribution of state governments and union territories and 9% is supposed to be contributed by organisations and individuals interested in minorities’ welfare. While the government of India has met 98% of its contribution promise, only 59% of the state government contributions are in. The most pathetic aspect is that out of the Rs 76.50 crore expected contributions from organisations and individuals, only Rs 1 lakh has been raised thus far. Among the states, only Delhi, Himachal Pradesh, and West Bengal have paid 100% of their contributions. Some of the worst offenders are Punjab which has paid only 20% of its promised contribution, Tamil Nadu with only 35% paid up and Uttar Pradesh, which has paid up a measly 19% of its promised contribution.
Even this Rs 676 crore could have an impact for the better for the minorities if their schemes are properly implemented, but this seems hardly to be the case. The NMDFC depends on the state channelizing agencies (SCAs) which are nominated by the state governments. Having to work through SCAs impacts the effectiveness of the NMDFC’s programmes. It also has a network of about 200 non-governmental organisations (NGOs) throughout India to
reach its intended populations. Ninetysix per cent of the funds disbursed by NMDFC is through the term loan scheme which makes available a loan of up to Rs 5 lakh. The corporation annually disburses, on an average, Rs 10 crore under this scheme. Over the past five years it has benefited 1,47,820 people distributing a total of Rs 57 crore. The microfinance scheme of the corporation has distributed a further Rs 6 crore, benefiting 79,781 people in the last five years.
The Ranganath Misra Commission report had this to say about the NMDFC:
…the total flow of credit from the NMDFC, in comparison to other financial institutions, is extremely small. This limits the impact of NMDFC assistance on the economic progress of minorities. Moreover, obtaining a guarantee from the state government remains the biggest hurdle to getting a loan from the NMDFC. Also, due to financial constraints, the state governments are reluctant to guarantee loans.
Hostages to the SCAs, both these flagship schemes – term loan scheme and microfinance scheme – have been implemented erratically. Out of 27 states and union territories that participated in the term loan scheme, only Kerala shows some consistency in distributing money under this scheme. Figures for all the other states show inconsistency of participation. Sixteen states have zero distribution in one or more years. Bihar, for example, distributed Rs 8 crore in 2004-05, nothing in 2005-06, and Rs 3 crore in 2006-07. Another example is Uttar Pradesh, which has not distributed any money since 2006-07! Similar is the case with NMDFC’s microfinance scheme. Nineteen states had one or more years of no disbursement at all. Clearly, since the success of the corporation’s schemes is dependent on the cooperation of the state mechanisms and the NGOs, the NMDFC does its part to keep them happy.
The NMDFC pays the SCAs Rs 1 crore in the name of infrastructure development and, in addition it also pays 1% extra interest to SCAs for the loans disbursed. Over Rs 40 lakh was given in interest-free loans in 2006-07 to NGOs. All this money is meant for the SCAs and not for the minorities. The NGOs also get financial support to help recover the loans they give out but recovery has been only around 57%. The problem with these NGOs is not only poor performance. The NMDFC has been forced to take legal action against some of these NGOs for clear unlawful practices. A total of 51 NGOs are facing legal suits by the corporation to recover more than Rs 1.8 crore.
The Minority Affairs Ministry has three types of scholarships for minority students, pre-matric, post-matric and meritcum-means. About six lakh students are to benefit from these scholarships every year. But just like other schemes of the government, it has not been easy for the intended beneficiaries to access these scholarships. The application is six pages long and available only in English. The scholarship application also requires six additional documents, two on official stamp paper. Many poor and deserving students are unlikely to have the resources and expertise necessary to correctly deal with all this cumbersome paperwork. A number of students who did qualify complained of not getting the money that was promised to them.
Solutions
The solution to all these problems is not to have another commission to investigate matters. The solution is also not in promulgating other schemes and programmes. The first thing the government must do is to constitute a joint parliamentary committee to monitor the implementation of these and other schemes meant for the welfare of the minorities. Second, there need to be sustained awareness campaigns among the Muslims, and minorities in general, to help them know about and correctly identify relevant government schemes and also their rights and duties as citizen of India.
Muslims can raise funds, establish schools and colleges, and organise selfhelp groups but all these efforts together cannot match the funds required to meet the needs of the community over the entire length and breadth of India. It is therefore necessary that the government fulfil its promises towards minority development and Muslim groups need to monitor these schemes at the grass root level to ensure proper implementation. There are many other solutions too but, finally, it all depends on how sincere the governments at the states and centre are towards minority welfare.
Published: september 5, 2009 vol xliv no 36 EPW Economic & P 20 olitical Weekly
A version of it published in Muslim India 305, Nov 2009.
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