Atanu Dey On India's Development

Pragati Aug 2009: To be Free

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pragati_aug09

The August 2009 issue of Pragati is out. I have a contribution in there. My perspective is that the Indian government must stop subsidizing Muslims who go on haj, and the more general case that the government must stop meddling in private religious affairs of the citizens. The text of my article is below the fold, for the record.

Stop Subsidising Pilgrimages
The Haj should be financed from private charity

In theory, according to its Constitution, the Indian state is secular; in practice, unfortunately, it is far from it. Indian governments routinely meddle in religious affairs and do not treat all its citizens as equal in matters of religion. They involve themselves in matters such as temple administration, fund management of temple donations, and subsiding pilgrimages. The most blatant example of such gratuitous meddling is the subsidy given to Muslims for going for haj to Saudi Arabia. In 2008, Indian taxpayers paid around Rs 700 crores (US$140 million) for Muslims to travel to Saudi Arabia.

Is that a reasonable thing for the government of India to do? No: it is bad in principle, economically inefficient and morally wrong. The government of a secular state must not concern itself with religious matters. India would do well to consider the example of the United States.

The first item of the US Bill of Rights, authored principally by James Madison and adopted in 1791, begins with the injunction that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof . . .” The absence of sectarian strife in the US is at least in part attributable to that amendment which, in the words of James Madison establishes a wall of “total separation of the church from the state.”

Something like the first amendment is vitally important and must be among the core set of rules of all civilized states. It traces its origins to the ideas of John Locke who held that each individual is free and equal, and that the job of the government of a civilized society is to protect the property rights of its citizens. The US strictly maintains that separation, as it should since it claims to be a secular state. It contrasts sharply with what goes on in India.

The rationale behind the Indian government’s Haj subsidy goes against any notion of social justice, fairness, and economic reasoning. Firstly, religion is a purely private affair and the government of a purportedly secular state should not get into the business of promoting any religion. Subsidizing the Haj is discriminatory and tantamount to endorsement of Islam. No other country on earth – including Islamic states – subsidizes haj.

Second, the subsidy is unfair. Fairness is the cornerstone of justice. It is unfair — and therefore unjust — for the government to force non-Muslims to subsidize the Haj because ultimately it is the taxpayers’ money that the government hands out. For an Islamic state to tax its non-Muslim subjects is understandable since Islam dictates that non-Muslims pay jizya — “a poll-tax levied from those who did not accept Islam, but were willing to live under the protection of Islam, and were thus tacitly willing to submit to the laws enforced by the Muslim State.” The Indian government is not Islamic and therefore must not impose jizya on its citizens.

Third, the haj subsidy politicizes a purely religious matter. Political parties attempt to woo Muslim votes by increasing the subsidy. They are in effect robbing non-Muslims to pay Muslim, thus attempting to gain the endorsement of Muslims. This is totally unconscionable.

From an economic point of view, subsidies and taxes are sometimes justified. For instance, revenues required for the provision of public goods have to be raised in some way and taxes are one way of doing so. Subsidies are justified in cases where markets fail to provide the socially optimal quantities of public goods. Even then, from an economic efficiency point of view, the taxes required for balancing the subsidies should be paid by the beneficiaries of the public good in question.

A case can even be made for the tax-funded public provisioning of some non-public goods and services, as when very high transaction costs are involved. Collective provisioning through taxes of a private good is justified when it is too expensive to determine individual quantity consumed for apportioning costs among a very large number of users.

The haj subsidy paid for from general tax revenues cannot be justified on the economic grounds mentioned above. The Haj is a not a public good; there is no market failure in its supply; the apportioning of costs is simple and efficient.

Can the Haj subsidy be justified on the grounds that it is charity? It is said that charity begins at home. And that is where it should stay. As a general principle, governments must not appropriate for itself the purely personal decision of its citizens on the matter of which charitable activity to support and to what extent. It is a matter of property rights: one has a right to spend one’s income as one sees fit. Using tax money to support discretionary spending is tantamount to extortion under the threat of violence, since one can be imprisoned for refusing to pay taxes.

Finally, there is the pernicious endowment effect: once an unearned benefit is granted, it is very difficult to remove it without incurring the wrath of the beneficiaries. No government would like to run the risk of removing the subsidy and antagonizing a large voting constituency.

The problem has a straightforward solution: move the funding of the haj subsidy from the public domain to the private domain. Constitute a non-governmental body whose task is to raise funds from private citizens. It is possible to do so in this day and age of low transactions costs due to the internet and mobile telephony. When people voluntarily contribute to fund the subsidy, it moves from the realm of coercion and becomes truly charitable.

This also takes the politics out of the whole matter and reduces the temptation that politicians have in robbing one group to gain the support of another group. By making this entirely voluntary, it removes the deep resentment many non-Muslims feel regarding the matter.

But there is a larger point which goes to the heart of what the job of a government is. Protecting the lives and property of its citizens is the primary reason for its existence. Everything else is secondary. Citizens should be on guard and prevent the government from usurping the freedoms that rightfully belong to them. When the government intrudes into such personal matters as whether or not to support the religious activities of some specific group, the state moves a little bit closer to fascism.

India needs to become a truly secular state since it is multi-religious. Its government has to be constitutionally directed to maintain a strict distinction between matters of religion and matters of state. If this requires a constitutional amendment, then it is time to introduce such a bill. The Indian government has to stop riding roughshod over the basic inalienable rights of its citizens – that of the rights to personal property and equality before the law. India needs the equivalent of the first amendment to the constitution of the United States of America.

  • kalyanyerra

    Hi,

    I am truly enjoying reading your blog. Its a treasure.
    Your writing style and the way you draw conclusions is every elegant.
    I always used to criticize the way politics undefy secularism, but your post is highly motivating and pushing me to think more constructively about the world we are living in. I specially like the solution you suggested in this article sounds.Straightforward yet awesome.

  • nrashwin

    Hi,
    Never had thought about this. It has got me thinking. You have stated the problem and the solution, which many fail to do.
    That is the best part.