Assignment on Concept of Islamic Economics

Economics in general, are quite important. The objective of Islam is to promote wisdom and welfare of the people in the world as well as in the Hereafter. This welfare lies in complete justice, mercy, well-being and wisdom and safeguarding their faith, life, intellect, posterity and their wealth. The Islamic economics is perhaps among the most important economics at the moment. This is not simply due to our relation to Islam, but to our sincere belief that Islamic economics can play an important role both nationally and internationally.

What is Islamic Economic:
Dr. Monjer cuff said : An aslamic economy is defiend as an economy where the islamic laws and institutions previal in the islamic ideology and practice its way of life.
Dr. Khurshid Ahmed said : Islamic Economics -Economics is an Islamic frame work operates with ats feet firmly rooted in the value pattern embodied in the Holy Quran and the sumnah .
Dr. Hamid said : Islami Economics is the part al aslami regulations which deals with economics. So eial and moral behavior of human being in case of production distribution and consumption of goods and services
Dr. Omar chaprra said: Islamic Economics is that branch of knowledge which helps realise human well being through an allocation and distribution of scarce resource that is in conformity with Islamic Teachings without unduly curbing individual freedom or creating continued macro-economic and eco logical imbalances.

So we tell:
Economic policy in Islam is a global and comprehensive pervade all human aspects in consideration. It takes care of all human needs and tries to accommodate them. Islam recognizes the social contradictions that are inherent in life, viz., the static versus the developing, individual versus common interest, material versus spiritual needs. The fact that these social contradictions are seen in Islam as the basis for cooperation and complementarily, not for conflict and contrast. Islam, therefore, contrary to all other systems, makes sure these contradictions exist and accommodates them all without jeopardizing one another.

Fundamentals of Islamic Economics System A. Tawhid (Unity):
It means that the universe has been consciously designed and created by the Supreme Being, Who is One and Unique, and did not come into existence by chance or accident. Allah says in the Holy Qur'an,
Men who celebrate the praises of Allah, standing, sitting, and lying down on their sides, and contemplate the (wonders of) creation in the heavens and the earth, (With the thought): "Our Lord! Not for naught Hast Thou created (all) this! Glory to Thee! Give us salvation from the penalty of the Fire. -Surah Al-Imran (3:191)

Objectives of Islamic Economics:
i. Replacement of interest by profit sharing;
ii. Creation of money through a process of investment, rather than through process of lending,
iii. Social institutions, specially the state, play an active role in the economic process in order to ensure the realization of the social objectives through regulation of markets as and when requires,
iv. Zakat serves as an effective instrument of transferring some resources from the rich to the poor, thus contributing to the realization of the social objectives,
v. A minimum level of income is guaranteed to all members of society who are, however, expected to work for it, to the extent that they are able.
Principles of Islamic Economic :
· Design the moral values socio-economic condition.
· Helping the needy and helpless peoples.
· Role of assistance.
· Contribute to self dependency.
· Earning through agricultural activities.
· Utilization of human and material resources.
· Principle of self-help on self reliane.
· Equitable distribution of wealth & income and disciplined private ownership.

Main Elements of Islamic Economics
The main themes, among others, of Islamic Economy are:
Zakah literally means blessing, purification, increase, growth, appreciation and goodness. It is so called as it blesses the wealth from which it is taken and protects it from misfortunes.
Our Holly Prophet (SM) Said: “One who eats hearts content while his neighbour storves is not a believer”.
Technically Zakah is defined as "A determined portion taken from wealth and allocated to those deserving it, by a Qur'anic injunction." Sometimes Zakah is referred to in the Holy Qur'an as Sadaqah (alms). Allah, the Almighty, says in the Holy Qur'an:

Of their goods, take alms, that so thou mightest purify and sanctify them; and pray on their behalf. Verily thy prayers are a source of security for them: And Allah is One Who heareth and knoweth.
Surah At-Tauba (9:103)

Riba :
After knowing this severe verdict of the Qur'an and the Sunnah against riba, it is necessary to determine what it really stands for. The word 'Riba' in Arabic language, literally means increase, addition, expansion or growth. It is however, not every increase or growth which has been prohibited by Islam. In the Islamic Shari'ah, Riba has a special meaning, Riba technically refers to an unjustified 'premium' that must be paid by the borrower to the lender along with the principal amount as a condition for the loan or for an extension in its maturity. In this sense, Riba has the same meaning and importance as, interest in accordance with the consensus of all the fuqaha (jurists) without any exception. The term Riba is however, used in Shari'ah in two senses. The first is Riba al-nas'iah and the second is Riba al-fadal.

Riba Nasi’ah:
The term nasi'ah comes from the root nasa'a which means to postpone, defer, or wait, and refers to time that is allowed for the borrower to repay the loan in return for the 'addition' or the premium. Hence Riba al-nasi'ah refers to the interest on loans. It is in this sense that the term riba has been used in the Qur'an in the verse "Allah has forbidden interest". This is the Riba which the Prophet, peace be upon him, referred to when he said, "There is no Riba except in nas'ah

Riba Fadal:
Islam, however, wishes to eliminate not merely the exploitation that is intrinsic in the instruction of interest, but also that which is inherent in all forms of dishonest and unjust exchanges in business transactions. These are extensively identified in the teaching of Qur'an and Sunnah. However, they are also encompassed by the generic term of riba al-Fadal, which is the second sense in which riba has been used and which is encountered in hand-to-hand purchase and sale of commodities. It covers all spot transactions involving cash payment on the hand and immediate delivery of the commodity on the other. Some relevant Hadith are:

Once Bilal brought Barni (i.e. a kind of dates) to the Prophet and the Prophet asked him, "From where have you brought these?" Bilal replied," I had some inferior type of dates and exchanged two Sas of it for ones of Barni dates in order to give it to the Prophet; to eat." Thereupon the Prophet said, "Beware! Beware! This is definitely Riba (usury)! This is definitely Riba (Usury)! Don't do so, but if you want to buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money.