INSTRUMENTS OF

PUBLIC FINANCE IN
ISLAM
GROUP MEMBERS

 M Shahzad Khan

 Shabir Ahmed
 Lay Out
 Introduction
 Public finance
 Zakaat and Economic
 Zakaat and public finance
 Nisab
 Public recipents of zakat
 Efficient allocation of zakaat
 Benefit of zakaat
 Charity or sadaqah
 Public Finance.

Public Finance.
The revenue collection and spending activities of
the government
1. Public sector.
2. Private sector.
Need of Public sector.
 Welfare
 Infrastructure
 Defence
 Regulatory authorities.
 Economical prospective
 Economically, Zakaat is the best
check against hoarding. Those who do
not invest their wealth but prefer to
save or hoard it would see their wealth
dwindling year after year at the rate of
the payable Zakaat. This helps
increase production and stimulates
supply because it is a redistribution of
income that enhances the demand by
putting more real purchasing power in
the hands of poor.
Zakaat and Public Finance

 Zakaat is the collection and

spending habits of the
government from Sahib-e-Hasiat.
 Aiming to bring about equality in
the society and the social up lift
of the general public.
 A continuous reminder of what
ever you earn is from Allah and
must be spent according to his
will.
 Nisaab
 Nisaab is the amount of cash, stock or bonds,
other cash assets which is to be paid to the
government no excess.
 Nisaab of cash, stock or bonds, other cash
assets is the equivalent amount of Gold or
Silver.
 Nisaab is calculated by adding up the cash
value of all the assets such as gold, silver,
currency etc. and if it is equal to or in excess
of the minimum Nisaab then it is payable.
 Zakaat is due at the rate of 2.5% .
Public Recipients Of Zakaat
 FUQARA:

 MASAKEEN:

 AL-AMILEEN:

 MU-ALLAFATUL-QULUB:

 AR-RIQAAB:

 AL-GHAARIMEEN:

 FI-SABILILLAH:

 IBN-US-SABEEL:
EFFICIENT ALLOCATION

y1

y0

B
g1
All other goods

A C
g0 Te
x t

o E0 E1 y y1
Goods being redistributed in kind eg. education
Benefits of zakaat
 It reminds Muslims of the fact that
whatever wealth they may possess is due
to the blessings of Allah and as such it is to
be spent according to the His commands.

 Zakaat functions as a social security for all.

Those who have enough money today pay
for what they have. If they need money
tomorrow they will get what is necessary to
help them live decently.

 Zakaat payer pays his dues to Allah as an

act of worship, a token of submission and
an acknowledgment of gratitude. The
receiver of Zakaat receives it as a grant
from Allah out of His bounty, a favor for
which he is thankful to Allah.
 Charity
 “Giving to the poor is lending to God”
 The Word charity has a noble and religious touch.
 All religions preach charity and exhort their followers to
practices it in spirit and words.
 All voluntary acts of alms giving ,helping the poor and
needy ,relieving the people in distress are gestures of
charity.
 Infact Islamic charity is one of the important features of
Islamic economic system that is based on equity and
equality. Honest earnings and correct spending.
 Act of charity can be divided under two heads.
1. Charity of wealth
2. Charity of deeds
 Both the act of charity and doing good are the basic economic and
moral principals of Islam. Charity demands that money should not be
concentrated in a few hands as we see in Pakistan ,neither it is to be
amassed.
 All , the parents and relatives ,neighbors and the poor and the needy
have shares in true believer's earnings.
 All acts of kindness, benevolence, forgiveness and peace making are
part of Islamic Charity.
 Even removing a stone from the path ,feeding the poor, helping the
people in distress, kindness to women and orphans, smiling and
saluting others are acts of charity.
 The resulting social and economic evils are before our eyes.
 Institutions

 Bait-ul –mall
 Department of Oqafah

The special amount of charity on both Eids.

 Fatirna (Eidul fatir)
 Meat of Sacrificed Animals (Eidul azha)

 Purchasing power increases

 Economic growth
 Decrease in unemployment
Questions and Answers