islamic economic system slides

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076 •Haseeb Razzaq

011 •Awais Safdar

094 •Rizwan Safder

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ECONOMIC SYSTEM

An economic system is a system that involves the production, distribution and consumption of goods and services between the entities in a society particular to solve the economic problems.

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Market system Command system Islamic system

TYPES OF ECONOMIC SYSTEMS

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A system that involves the production, distribution and consumption of goods and services between the entities in a society under the Islam laws to solve the economic problems.

ISLAMIC ECONOMIC SYSTEM

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Achievement of Falah

Material well-being of the citizens of an Islamic state.

Establishment of Social Justice To establish socio-economic justice among all the members of the nation

OBJECTIVES

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Achievement of Moral and Material Development Material as well as moral development of the Muslim community

Circulation of Wealth Discourage hoarding and ensure the constant circulation of wealth

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Elimination of Exploitation

Elimination of exploitation of one human by another

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ZakatTax which is collected from the rich and distributed among poor

Ushar

Tax on agricultural produce Kharaj

An agricultural tax received from non-Muslim

TAXATION

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Jizyah A tax received from non-Muslim

Khumasthe share of the Islamic state which was collected from:• Spoils of war• Mineral wealth• Treasure-Trove• Extracted from the sea

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Islam

ic Banking

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The banking system based upon the principles of Islamic law and its practical application through islamic economics

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Profit & loss sharing No fixed interest (Riba) Investment in halal business

FEATURES:

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Started from Egypt in 1963 by Ahmad Elnagger

1975 – Islamic Development Bank Islamic banking growing at the rate of 10-

15% Size about $200-$800 billion. 250 islamic financial institution in 50-75

countries.

HISTORY OF ISLAMIC BANKING

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Started in 1977-78 In 1985 all commercial banks start Islamic

banking 1991 declared as unislamic 2000 SBP declared to start islamic banking. 2002 issued license to Meezan bank.

ISLAMIC BANKING IN PAKISTAN

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MODES OF BANKING AND FINANCE

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PARTICIPATORY MODES Mudaraba Musharaka Diminishing Musharaka

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TRADING MODES

Ijara Murabaha Musawamah Salam Istisna Tawaruq (Exceptional)

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1. GDP growth2. Money3. Credit4. Tax on income/

Consumption5. Deficit financing

Modern Economic Principles

Government Companies Individuals

1. Economics is a Science of wealth (to teach selfishness). K.K Dewett

2. Economic is made to study “wealth” rather than “welfare”.

3. Whatever the economics is concerned with it is not concerned with: Study of relation of real goods (physical science) and wealth (monetary

science) Study of relation of material welfare (of individual) and general welfare (of

humanity). Study of relation of “short term needs: and “long-term needs”

1. Sales growth2. Money3. Credit4. Consumption5. Quick Profit

1. Income growth2. Money3. Credit4. Consumption5. Wealth making

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1. Wealth Tax (عبادت)

2. Guarantee basic human needs

3. Restricting wealth accumulation

1. Earned income (محنت)

2. Restricts consumption (اعتدال)

3. Distribute surplus wealth (عبادت)

Islamic Economic System



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1. Wealth Tax (عبادت)

2. Guarantee basic human needs

3. Restricting wealth accumulation

1. Earned income (محنت)

2. Restricts consumption (اعتدال)

3. Distribute surplus wealth (عبادت)

Islamic Economic System



Short-term approach

Long-term approach

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IS IT BENEFICIAL…???

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EXAMPLE:

disposable Amount/ Nisab Rs. 100,000

In Current system: deposit in bank Interest Rate 13%

At year end Amount will be Rs. 113,000

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IN ISLAMIC ECONOMY:

No interest

At year end

Amount will be Rs. 100,000

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IS THE ISLAMIC ECONOMIC SYSTEM APPLICABLE.?

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Change the whole system Change people’s attitude

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THANKS

islamic economic system slides

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