Opinion | The Economic Rationale For Amending The Waqf Act

Imagine waking up to discover that your family's ancestral land - where your roots run deep - has suddenly been claimed by someone else. This isn't a plot twist from a novel but a real-life predicament faced by villagers in Tamil Nadu's Thiruchendurai. Rajagopal, a farmer simply looking to sell a small piece of land, was told that his property now belonged to the Waqf Board. The sheer absurdity of the situation is reminiscent of a Kafka novel, where a certain machinery churns out decisions detached from reality.

C.S. Lewis once wrote, "When you argue against Him you are arguing against the very power that makes you able to argue at all". The landowners found themselves in a similarly paradoxical situation, unable to contest the very system that reclassified their land overnight. This farcical scenario shows the urgent need to amend the Waqf Act, which, as it stands, can transform long-held private land into Waqf property with the stroke of a pen, leaving rightful owners in the lurch.

What Exactly Is A Waqf Property?

A Waqf, under the Waqf Act of 1954, is a property irrevocably dedicated in the name of God for religious and charitable purposes, essentially rendering it non-transferable and perpetually detained as a charitable act towards God. Governed by the Waqf Act of 1995, Waqf properties-whether public or private-are managed by a 'mutawali' and overseen by state Waqf Boards, which wield significant power, including the ability to sanction transfers of immovable properties. Outlandishly, these properties, once designated as Waqf, are locked into perpetuity, immune to dissolution, and detached from broader legal frameworks, such as the Indian Trusts Act. The Waqf Board, a legal entity with sweeping authority, administers these properties, ensuring they serve the pious purposes they were intended for, and the Central Waqf Council advises and monitors these state-level boards.

One of the major issues has been the broad powers granted to Waqf Boards, which have sometimes led to the controversial declaration of government and private properties as Waqf. For example, in Surat, the entire municipal corporation headquarters was declared as Waqf property, raising concerns about the overreach of the Waqf Board's powers. Similar disputes have arisen in other parts of India, where properties with long histories have suddenly been declared Waqf, often leading to legal battles and public outcry.

Lack Of Data And Documentation

The lack of clear documentation and the potential for misuse of the Waqf Act have exacerbated these disputes. Courts have intervened in some cases, ruling that the Waqf Board must provide valid documentary evidence to support its claims. Despite these rulings, the expansive powers of the Waqf Boards continue to be a source of controversy.

Waqf properties represent the third-largest landholding in India, only behind the Defence Ministry and Indian Railways. The Ministry of Minority Affairs has a portal that has digitised the data for these vast assets through the Waqf Assets Management System of India (WAMSI), part of the Qaumi Waqf Board Taraqqiati Scheme (QWBTS). This scheme aims to safeguard and prevent encroachment of Waqf properties through digitisation and GIS mapping. However, despite the entry of 8,72,324 immovable Waqf properties into WAMSI and the GIS mapping of 3,29,995 properties, a lot still needs to be done.

According to the Waqf Management System of India (WAMSI), the status of Waqf properties shows significant management and documentation challenges. The largest category of properties, representing 436,169 units, has no information available, indicating a significant gap in data collection and transparency. Additionally, 58,898 properties are encroached upon, reflecting the extent of unauthorised occupation. There are also 7,831 properties under external litigation and 5,371 under internal litigation, highlighting the legal challenges faced in securing these assets. A substantial portion of properties, totalling 3,39,505, are non-encumbered. 

How The System Has Led To Disputes

The process of declaring a property as Waqf, particularly under the concept of "Waqf by use", has led to numerous legal disputes. This ambiguity allows for conflicting claims between Waqf Boards and other stakeholders, including government agencies, leading to prolonged litigation and delays in the utilisation of these properties for charitable purposes.

Further, the Waqf Act originally established tribunals to resolve disputes over Waqf properties. However, these tribunals are criticised for being inefficient and lacking judicial independence. Recent amendments have attempted to address this by modifying their composition, but concerns remain about their ability to handle complex property disputes effectively.

What The Sachar Committee Said

Several committees have raised issues with the Waqf Act. For instance, while introducing the Waqf Amendment Bill 2024 in Lok Sabha, the Minority Affairs Minister highlighted the 1976 Waqf inquiry report, which observed that Waqf properties were controlled by Mutawallis and called for corrective action. The report also recommended establishing a tribunal to resolve disputes and emphasised the need to fix improper audits and accounts of Waqf boards.

The Sachar Committee flagged the issue of meagre revenue generation from Waqf properties. The report observed that annual income from Waqf properties (in 2005) across India was approximately ₹163 crore, representing a meagre rate of return of just 2.7%. The report suggests that if these properties were developed and put to efficient commercial use, they could generate at least a minimum return of 10%, translating to approximately ₹12,000 crores per annum.

A Slew Of Regulatory Issues

Historically, Waqf properties have faced significant challenges, including underutilisation, illegal encroachments, and widespread mismanagement, which have hindered their ability to generate much-needed revenue for the community. A lack of strategic planning, evident in the absence of comprehensive business plans, market analysis, and risk management strategies, has contributed to this issue. With insufficient monitoring and enforcement, regulatory oversight has been weak, allowing properties to be leased at below-market rates due to corruption. 

Financial mismanagement has further compounded these problems, with funds often misappropriated or not reinvested effectively. Additionally, the lack of community involvement and oversight has led to decisions being made without adequate consultation, further alienating the intended beneficiaries. To overcome these challenges, it is essential to implement strict regulatory frameworks, enforce strategic business plans, and foster active community engagement, ensuring that Waqf properties are managed effectively and generate sustainable revenue for the community.

Hence, reforms are needed. Despite attempts to bring order to the chaos, like digitising records, the system still feels like a Wild West of land claims.

(Bibek Debroy is Chairman, Economic Advisory Council to the Prime Minister, and Aditya Sinha is OSD, Research, Economic Advisory Council to the Prime Minister)

Disclaimer: These are the personal opinions of the author