by Masood Hussain
SRINAGAR: The two Eid’s, separated by around 70 days, are ordained to be the happy days in the Muslim lunar calendar. The families are supposed to be fed well and encouraged to celebrate the occasions. Though happiness is seen more as a state of mind, it still requires money to make the occasions look happy. Good food, looking good, wearing better and donating to the poor – this all is capital intensive.
That is perhaps why the twin Eids are huge money guzzlers. The barometer for this aspect of the celebrations is the cash that banks dispense in the run-up to the festival. Since Jammu and Kashmir Bank is the manager of two-thirds of Jammu Kashmir’s savings and debts, its data offers a clear trend.
Regardless of how markets behaved and why most of the bazaars, especially in Srinagar, gave a dreaded deserted look, the people withdrew huge money. A Lot of the money changed hands only, however.
Unlike Kashmir’s real market, however, the virtual market was hugely busy for at least four days before the Eid. “All companies put together, we deliver around 15,000 parcels on daily basis,” one major courier company manager said. “But for the last four days of Ramzan, it doubled and it was almost 30,000 parcels.”
The costs of these parcels vary. Safely, he said, you can take an average of Rs 800, an order. “It means Kashmir was making an online purchase of Rs 2.4 crore, a day and it continued for four days,” the manager said, on the condition of anonymity. “The online is the in-thing, at least in Srinagar.”
Most of the private sector disbursed salaries twice this month – one for March in the first week of April and one for April, in the last week of April. Right now, quite huge money is in circulation and Kashmir is high in liquidity.
Let us have some ideas about the cash withdrawals from Jammu and Kashmir Bank – which faced a lot of music for its fast-ageing app, mPay, three days ahead of Eid al Fitr, a celebration for breaking the fast.
April 30 was the Dyaar Arfa, a name given peculiarly to the day that separates the Eid by a day, the day of Arfa. Endemic to Srinagar perhaps in the entire Muslim world, this day is specific to money – an Arfa of money. Traditionally it is the day to dispense cash so that the faithful can arrange for the festival, scheduled a day later.
The day, this year, witnessed a sum of Rs 479. 32 crore changing hands despite JK Bank’s mPay app behaving like a ‘miser king’, sleeping for longer periods amid small transactions, a phenomenon attributed to the load by its managers. These included Rs 216.20 crore being withdrawn through ATM networks across Jammu and Kashmir on JK Bank cards alone. Even though mPay was unwell, it still managed 298984 transactions involving Rs 248.62 crore. Besides, there were 140000 purchases on JK Bank’s POS machines involving Rs 14.50 crore.
World Labour Day was the main business day as everybody thought May 1, is the Arfa, a day ahead of ahead which is called Chand Raat in the rest of the Indian subcontinent. Markets were cool but a lot of money was changing hands.
The day saw a whopping amount of Rs 817.61 crore changing hands from the coffers of Jammu and Kashmir Bank alone. It included Rs 292.28 crore being withdrawn through the ATM network using the JK Bank cards; more than seven lakh transactions through mPay involving a transfer of Rs 508.48 crore and Rs 16.85 crore being spent through JK Bank’s point-of-sale (POS) machines for 182164 purchase transactions.
In Kashmir, almost everybody had decided to celebrate Eid on May 2, Monday, but the great escape that the crescent moon did, pushed South Asia to Tuesday. This gave one more day to the people to get and spend cash.
Data available with Kashmir Life newsroom suggests that even this lean day led to the withdrawal of Rs 537.94 crore. It includes withdrawals through the entire banking sector ATMs (on JK Bank cards alone) a sum of Rs 201.37 crore as the people made 133313 purchases worth Rs 13.29 crore. Besides, the day saw Rs 323.28 crore being transacted in 426613 transactions using the bank’s moribund mPay.
So, we are looking at an estimated expenditure of around Rs 2500 crore for celebrations ahead of Eid – apparently in the last Ashra (10 days) of the Muslim month of fasting. Of this, in 2022, almost Rs 1800 crore cash was withdrawn and possibly spent in the last three days of Ramzan through the channels offered by JK Bank alone.
The transaction data of three days may offer an idea but will never give the whole picture. Primarily, JK Bank despite being the big brother in Jammu and Kashmir’s banking sector is not the sole player. Secondly, there are more instruments for withdrawing money from banks other than plastic (debit and credit cards), POS machines and the mPay.
“We have a transaction basket, which includes UPI and e-banking,” one JK Bank executive said. “The traditional withdrawals through bank cheques continue to be a major tool and a prefered one by the businesses.” Another bank official said that if it was calculated in an all-inclusive manner, the transactions could be in thousands of crores.
The same is true with other banks. “Ours being a centralised bank, we get our data at the end of a month so we may not be able to tell you everything,” one HDFC executive said. “However, it is a fact is that our 200 ATMs operated non-stop and in the days ahead of Eid, we do see transactions surging by almost 70 per cent to the normal daily work.” After JK Bank, HDFC runs the major ATM network in Jammu and Kashmir and a conservative estimate suggests almost Rs 200 crore were withdrawn in the last three days from HDFC alone.
Not Moving Out
What is interesting is that every transaction does not mean moving out of money from the banking system. It moves from one account to another account and in most cases, it remains within the system. Transactions through POS, mPay, e-banking, and UPI (Unified Payment Interface) – all transfer funds from one account to another, without dispensing cash.
That essentially means that out of Rs 1800 crore transacted three days ahead of Eid, more than Rs 1125 crore remained within the banking system. This, however, changed hands – from giver to the taker. This leaves slightly more than Rs 700 crore that people took out of the system using ATMs as cash in hand. There must be an equal and possibly a bigger amount that people withdrew using the traditional bank cheque withdrawal system.
Within a week to 10 days, a senior JK Bank functionary said, this cash also returns to the bank – at least two-thirds of it. “The rest of it remains in the piggy banks, wallets of the people and gultaans of sundry traders,” he said. “The banking system is so robust, especially after the financial inclusion and the digital banking that not much of the cash stays outside the system for a longer period. It eventually gets parked within the banking system.”
In the last few days, the only figure that appeared in media reports was about mutton consumption. Traders told reporters that around 650 truckloads carrying nearly one lakh goat and sheep heads were consumed by Kashmir. It amounts to around Rs 100 crore – almost all paid in cash.
Bakery and confectionery products that witness a good demand, especially in urban and suburban Kashmir and must be witnessing a turnover of Rs 20 crore. The apparel must be more than Rs 100 crore. Eidhi, an amount that elders gift to youngsters, females, dependants – and in certain cases to the workers – must be much more than the apparel, bakery and mutton put together.
What is being missed out in the Eid expenditure narrative is the charity. Though giving out to the deserving and underprivileged is a yearlong affair, the month of Ramzan is the most preferred month for charity. Zakat, for instance, a divine obligation envisaging paying 2.5 per cent of their total savings and wealth above a minimum amount, nisab, each year, can be done any time in a year but the people prefer doing it in Ramzan.
However, Ramzan has its specific charity which is obligatory for every Muslim alive till Fajr prayers on the day of Eid. It is called Sadka Fitr and is also known as Fitrana. It essentially has to be paid before the Eid prayers are offered and it is to be paid only to the people who are economically weak and fall in the have-nots’ category so that they feel enabled to celebrate Eid the same way as having-it celebrate.
Faithful have the option of deciding their own way of charity. They can offer 2.5 kgs of grains (equal to one Sa, an ancient Arab weight measure which is equal to four two-handfuls – in Kashmiri Doutch, and calculated by scholars to be equal to 2.5 kgs), the staple food they take; 2.5 kgs of dates or 2.5 kgs of raisins. Every year, Muslim scholars convert these measures into cash and offer the scale of basic minimum Sadqa that every Muslim has to offer. For 2022, in Jammu and Kashmir, the least Sadqa Fitr was capped at Rs 65 per head. The upper limit can extend up to Rs 3000 or even more, depending on basis of which variety of fruit one chooses to contribute in.
This charity is fascinating because it is distinct in the Muslim charity basket. This is a mass charity in which the haves’ have to give it to have-nots’ within a set deadline and at not less than the slab decided by scholars. It is a quick one-time fund transfer between two economic groups.
In the case of Jammu and Kashmir where more than 68 per cent of an estimated 13.6 million people (2021 estimate) are Muslims, it sets aside almost 93 lakh people within whom this fund transfer takes place. Jammu and Kashmir has the lowest below poverty level (BPL) population (10.38 per cent) in India and even if it is being taken as 13 lakh poor (within the 93 lakh population), it still means Rs 52 crore fund transfer taking place (from 80 lakh people to 13 lakh people) within a matter of few hours at the lowest rate of Rs 65. This charity is mandated to go to the poor only unlike Zakat and other Muslim charities. An abrupt Rs 52 crore plus capital infusion in the weaker section of the society must be having a gradual impact. What is beautiful about this Sadqa is that it is being done silently, without any publicity and lacks any overhead charges, unlike Zakat, where people associated with its collection and distribution can be paid from the corpus.
Social Groups, Charities
Ramzan is the only month in which most charitable organisations manage most of their budgets for the year. Even the seminaries and mosque managements secure most part of their yearly fund requirements.
“We have permanent donors who donate on monthly basis,” Javed Javad of Yateem Foundation said. “But we also manage fifty per cent of our requirements in this month only.” Foundation takes care of the orphans and helps destitute families live with dignity by transferring funds on monthly basis to their bank accounts.
Certain smaller groups manage most of their requirements in Ramzan. “Our 90 per cent budget gets collected in this month only,” a member of a smaller city charity, Akar Bakar said. “This year we had an interesting trend – our donors fell by around sixty per cent and at the same time the demand fell by nearly thirty per cent.” The fluctuating demand-supply in charities, however, is a different story.
“We manage almost 75 per cent of our requirements in this month only,” Aafaq Sayeed of the SRO said. His group is into diverse activities like Athrout, Help Poor and other organisations with a focus on health care. “I think the groups funded through charities must have a yearly requirement of Rs 50 to Rs 70 crore and most of it goes to their accounts in this month only.”
Not Hunger Alone
So, the month of Ramzan is not about hunger alone. This peculiar dieting does not help bodies survive better only. And the Eid is merely not a small breakfast celebration. It is a vital 29-30 day affair that helps Muslim societies manage some sort of a resource balance. While restraint helps bodies get healthier, the material contribution addresses societal deficits. That makes the breakfast celebration, a real accomplishment.