OPINION I Mint

The Waqf Act of 2025 arrives at a time when India, poised to become the world’s third-largest economy, still grapples with deep-rooted socio-economic inequalities. While GDP growth has transformed urban skylines and lifted millions out of poverty, the benefits of this progress have not reached all communities equally. The forthcoming reform of the Waqf  system—a vast network of Muslim charitable endowments—could, if implemented thoughtfully, become a tool to address one of the country’s most persistent development challenges: the  economic marginalization of large segments of India’s Muslim population.

Results from the PRICE ICE 360° Survey (2021), one of India’s most comprehensive household-level income surveys, underscores the scale and structure of these disparities. The survey reveals that while India’s overall per capita income (PCI) stood at ₹65,859 in 2020-21, Muslims as a group earned just ₹56,715 on average—about 14% below the national mean. Within the Muslim community, the situation is even more stark for Scheduled Caste (SC), Scheduled Tribe (ST) and Other Backward Class (OBC) Muslims, whose average PCI was only ₹50,179—the lowest across all socio-religious groups in India.

By contrast, Hindu Upper Castes, who earn ₹82,749 per capita, enjoy an income level that is 65% higher than that of SC/ST/OBC Muslims. Even among Muslims, a clear intra-group divide exists: upper-caste Muslims earn nearly 50% more than their marginalized co-religionists. These  disparities are not just income-based; they reflect structural disadvantages rooted in unequal  access to education, formal employment and  asset ownership.

Yet, the story of the last two decades is not only one of stagnation. In fact, some marginalized groups have experienced significant relative improvements. Between 2005 and 2021, Hindu SCs and STs saw a remarkable 637% increase in PCI, while Muslim upper-castes experienced 625% growth. The PCI of Hindu OBCs grew by 550%, and even the poorest group, Muslim SCs, STs and OBCs, recorded a 494% increase. This suggests that growth is happening—but it is uneven and not translating into parity.

These numbers tell a story of uneven development. For some communities, growth has meant catch-up; for others, consolidation. But for Muslim SCs, STs and OBCs, the data reflects a cycle of structural exclusion. Their economic disadvantage is compounded by limited access to salaried employment and higher education—two of the strongest predictors of sustained income mobility. Only 12% of households in this group report salaried jobs as their primary income source, and just 14% have a graduate as the highest-educated member in the family. These figures are stark, especially when compared to Hindu upper-castes, where 31% rely on salaried jobs and 30% report a graduate in the household.

This context places the Waqf Act of 2025 in a new light. India is home to huge Waqf properties, many located in urban areas with high development potential. Historically intended to support education, healthcare and community welfare, these endowments have suffered from chronic neglect, legal disputes and administrative opacity. Although the new law has been controversial on some of its details, it promises a digital overhaul of Waqf records, streamlined governance and greater community involvement. But the real test lies in whether these assets can be turned into engines  of social mobility for the sub-groups that need them most.

The potential is immense. Waqf properties could conceivably be used to establish educational institutions in regions where Muslim literacy and graduation rates lag behind. They could also host vocational training centres tailored to sectors where Muslim youth are active but underpaid—like construction, retail and various other services. In urban areas, Waqf assets could also support affordable housing projects, or incubators for small enterprises and artisans. The impact would be especially meaningful for Muslim SCs, STs and OBCs, who disproportionately remain in informal, low-wage occupations.

For this to happen, however, governance must be radically improved. Digitization must be paired with transparency: public access to records, third-party audits of revenues and clear guidelines for leasing and development. Most importantly, local communities—particularly women and youth—must have a voice in how Waqf properties are used. Without grassroots participation, there is a real risk of elite capture or political misuse.

The broader lesson from the ICE 360° data is that high economic growth does not automatically translate into inclusion. While some disadvantaged groups, like Hindu SCs and STs and Muslim upper-castes have made significant gains, others remain locked out of opportunity. Gaps in income, education and employment between upper and lower socio-religious groups are not narrowing fast enough. This is not just an economic issue; it affects social cohesion, political representation and national progress.

In an era when India’s demographic dividend depends heavily on youth employment and inclusive urbanization, ignoring the socio-economic lag of an estimated 112 million Muslims is no longer viable. The Waqf Act, 2025, offers a rare chance to bridge a persistent fault line in Indian society—not through subsidies or handouts, but by unlocking the potential of community-held assets.

India’s future depends not just on how fast our economy grows, but on how fairly the rewards of its growth are distributed. As we move toward a $5 trillion economy, justice and equity must become more than just constitutional ideals. They must inform every policy, every investment and every reform. The Waqf Act 2025, if done right, could show us how.