Is It Permissible to Accept a Government Grant for a Halal Food Processing Business and Later Own the Assets?
Answered by Shaykh Muhammad Carr
Question
I plan to start a food processing business in Allahabad, Uttar Pradesh, under a government scheme that provides a 35% to 50% grant of the total project cost. This support is a grant, not a loan or interest-based financial assistance.
According to the scheme, if I close the business after ten years, I will legally own the land, building, and machinery acquired through the project. The business will process halal products such as fruits, vegetables, grains, and honey.
Given that all scheme terms will be followed honestly and lawfully, is it halal for me to accept this government grant and retain ownership of the assets after the 10 years?
ِAnswer
In the Name of Allah, the Most Merciful and Compassionate.
I pray you are in good faith and health. May Allah reward you for ensuring your business funding is permissible.
The Prophet (Allah bless him and grant him peace) said, “ … This is a charity that Allah has granted you, so accept His charity.” [Muslim]
You are permitted to receive this government grant and retain ownership of the assets. The government has the authority to allocate funds to support the public interest (masalih al-‘amma). The recipient of such funding does not need to be indigent to qualify, as long as their focus on earning would not hinder them from fulfilling this public benefit. [See I‘anat al-Talibin]
Imam Ghazali states without restriction that a person unable to earn may receive government funding. [See Khatib, Mughni al-Muhtaj] It would be even more permissible for the government to assist such individuals by providing the means for earning through funding. The proverb, “Give a man a fishing rod, not a fish,” highlights the value of enabling someone to become self-sufficient, which is far more beneficial than offering temporary support.
Please consult with a local scholar, as additional details may significantly impact the answer beyond what is addressed in this question.
And with Allah alone is our success.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani
Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door for students. As an imam, he has the unique opportunity to serve his community in daily life.
In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari’ah Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.
