A Historic Institution at Crossroads The concept of Waqf—a perpetual charitable endowment under Islamic law—is an established legacy of social justice. ‘Waqf’ originates from the …
A Historic Institution at Crossroads The concept of Waqf—a perpetual charitable endowment under Islamic law—is an established legacy of social justice. ‘Waqf’ originates from the …
The concept of Waqf—a perpetual charitable endowment under Islamic law—is an established legacy of social justice. ‘Waqf’ originates from the Arabic root Waqafa (to stop or hold), signifying the permanent dedication of property for religious or charitable purposes. Once declared as Waqf, the property becomes inalienable—it cannot be sold, inherited, or gifted. The income generated is channeled toward social goods such as education, healthcare, and poverty alleviation. The institution of Waqf has long been a cornerstone of both social welfare and economic justice in Muslim societies.
In India, home to one of the world’s largest Muslim populations, Waqf properties represent a vast reservoir of community wealth. Yet, despite their potential, these assets have often been both underutilized and misused due to governance challenges and legal ambiguities. The recent Waqf (Amendment) Act, 2025, passed by the Indian Parliament, aspires to change this narrative by introducing reforms aimed at transparency, accountability, and modernization.
At the same time, the Act has sparked debate and criticism among sections of India’s Muslim populace, highlighting the need for inclusive dialogue and capacity building. For the Islamic Development Bank (IsDB), this development, although in a non-member country, underscores the importance of capacity building and knowledge-sharing in advancing inclusive growth and sponsoring this key tenet of Islamic finance.
Waqf institutions in India are public entities managed by State Waqf Boards and funded by private endowments to serve community beneficiaries, unlike government municipalities funded by taxes for local populations. Waqf institutions in India hold an estimated 600,000 properties, making them the third-largest landowner after the Indian Railways and the military. Despite a market value of around ₹1.2 lakh crore ($14.4 billion), these properties generate an annual income of less than 1% of their potential, with some estimates as low as ₹163 crore ($19.5 million). The significant gap between the potential and actual revenue generated by Waqf properties in India highlights a missed opportunity for the Muslim community to support vital sectors like education, healthcare, and poverty alleviation. This is largely due to factors such as encroachment, mismanagement, poor record-keeping, and lack of modern management.
Waqf governance in India shifted from decentralized, family-led management in the Mughal era to bureaucratic oversight under British rule, and finally to State Waqf Boards after independence, marking a shift from traditional trustees to state-controlled administration. Despite this, persistent issues like encroachment, weak oversight, lack of transparency, and outdated management have hindered Waqf property effectiveness in India, leading to the need for the Waqf (Amendment) Act, 2025.
The Amendment introduces several measures to remodel Waqf governance, some of which include:
The Waqf (Amendment) Act, 2025 is a polarizing piece of legislation. It aims to solve governance issues but has been met with criticism among the Muslim community who fear state overreach and the erosion of traditional practices like “Waqf by user.” There are also concerns that the amendment process lacked adequate consultation with Muslim organizations. Despite these criticisms, the Act intends to promote inclusive development. It protects the inheritance rights of Muslim women, ensures inclusive governance by mandating the inclusion of women and marginalized groups on Waqf Boards, and aims to combat corruption and professionalize management through the digitization of records to protect assets.
In recent times, countries like Türkiye and Malaysia have successfully modernized Waqf governance to unlock its economic potential for social welfare. Türkiye’s Directorate General of Foundations manages a vast portfolio of commercial properties and businesses, while Malaysia has embraced cash Waqf and corporate Waqf to fund strategic development projects like hospitals and universities. These models show a clear shift from passive, traditional management to a more dynamic, productive approach.
Following these global footprints, India can seek to professionalize its Waqf administration, moving away from decentralized, family-based control to a more centralized, expert-led system. The Muslims in India should also focus on developing productive Waqf by commercially monetizing viable properties to generate sustainable revenue, rather than simply preserving them. Finally, adopting modern digitization and transparent governance practices, as seen in Malaysia’s e-Waqf initiatives, could help combat corruption and mismanagement, ensuring waqf fulfills its intended purpose as a powerful tool for social and economic justice.
Capacity building is essential for the Indian Waqf ecosystem to overcome its governance gaps and rebuild community trust. Currently, the administration suffers from immense lack of professional expertise and a decentralized system, yielding to acute mismanagement. Providing comprehensive training to mutawallis and Waqf Board members can induce modern management practices, such as professional accounting and property management. This will professionalize the system, helping to unlock the vast economic potential of waqf properties and generate sustainable revenue for social welfare.
Capacity building and promoting transparency and accountability are also fundamental to addressing community apprehensions. The system can become more receptive and amenable by training Waqf officials on the importance of public disclosure and the use of technology, such as blockchain and digital recordkeeping. This aligns also with global models like Malaysia’s e-Waqf initiatives, which have successfully built trust by making information accessible to the public. Restoring trust is vital for attracting new endowments and ensuring waqf continues to serve as a powerful tool for inclusive development, particularly for marginalized communities.
Although India is not an IsDB Member Country, the Bank’s expertise in revitalizing Waqf assets globally offers valuable insights for India. IsDB can support the Indian Waqf ecosystem by sharing best practices and providing capacity-building support to educational institutions, Waqf trustees, and NGOs, focusing on knowledge transfer and technical assistance.
By combining these efforts, IsDB can act as a reagent for systemic change, helping Indian Waqf institutions transition from fragmented, underperforming entities to dynamic engines of socio-economic development, while also ensuring compliance with the Waqf (Amendment) Act, 2025.
