Economic system

🞂“An economic system is a system of

production and exchange of goods and
services as well as allocation of
resources in a society”.
Islamic economic system
🞂Islamic economic system consists of the social values
that are used to produce wealth under the guidance and
principles of Islam to achieve ‘Falah’ in this world and
in the hereafter.
🞂Major goal of Islamic Economic system is to reduce
the gap between the rich and the poor.
The concept of Halal & Haram
⮚Halal
🞂Halal means lawful, legal and riba free earning.
🞂Allah (SWT) says in Quran:

“O mankind eat from whatever is on earth lawful &

good and don’t follow the footsteps of Satan,indeed,he
is to you a clear enemy.(Al.Baqarah-168)”
⮚Haram
🞂The opposite of Halal is Haram which means unlawful
or prohibited. Haram is that which Allah and the
prophet(PBUH) have completely forbidden.
🞂Engaging in an act that is haram would result in
punishment in the next life, and may be even in this
life.
🞂Al-Bukhari reported that the prophet (PBUH) said:
🞂“There are some men who take Allah’s money
unlawfuly.Their will be Hell on the day of judgment for
them.”
Means of Distribution of wealth
🞂Wealth should not be restricted to any particular class
of the society.
🞂Islamic economic system support fair (not equal)
distribution of wealth.
▪ There are four main elements of distribution of
wealth:
⮚Zakat
⮚Sadaqat
⮚Inheritance
⮚Will (wasiat)
1. ZAKAT
🞂 Zakat is one of the pillars of Islam.
🞂 The deep meaning of Zakat is to increase and to
purify.
2. SADQAT.
Sadqa is derived from Sidq which means to give
charity to help the poor and needy confirming his true
devotion and service to Allah.
3. INHERITANCE
🞂The Glorious Quran contains specific and detailed
guidance regarding the division of the inherited wealth,
among the rightful beneficiaries.
4. WILL.
🞂 The islamic will is called Al-wasiyyat.
🞂A will is a transaction which comes into operation after
the testator’s death.
Salient features of Islamic Economic
system
🞂Economic system is regulated by Shariah.Islam
provides complete guidance in this domain.
🞂The following are the salient features of Islamic
Economic system:
1. This system provides the concept of Halal and Haram
(prohibited and unprohibited things). No money be
spent on prohibited things.
2. Honest earning has been encouraged.
3. Islam provides an ethical code for the businessman.
4. Riba (usury) has been banned.
5. There is no hoarding or corner-marketing (al-ikhtiar).
6. Islam ordains free circulation of wealth.
7. This system encourages spending in the way of Allah.
8. Islam prohibits israf and tabzeer which means
expending money on items which are banned and
prohibited.
9. This system provides economic and social justice.
10. Private ownership is allowed unlike the communist
system.
11. An Islamic setup provides a graceful
economic and social life.
12. It distributes the wealth in all social classes
13.The last and very important element of
Islamic economic system is that Allah is the
absolute owner of all economic resources
and these resources should be used according
to the command of Allah.