Adoption Tax Credit in India

To:
Minister of Women & Child Development
Minister of State (Independent Charge)
Shasthri Bhavan
New Delhi, India.

Copy:
1. Ms. Deepa Jain Singh, Secretary, Ministry of Child & Women Development
2. Shri. Joseph Mathew (Additional economic advisor, Economic Division), Ministry of Finance, New Delhi
3. Smt. Anuradha Prasad (Director of Budget, Budget Division) Ministry of Finance, New Delhi
4. Shri. J.K. Mittal (Chairman, Central Adoption Resource Agency - CARA), New Delhi.


Respected Smt. Chowdary,

It is with deep sense of appreciation for the concept of adoption in India I write this letter to you. I hope after reading it, you will strongly consider initiating a policy to extend an adoption tax credit to the desiring adoptive families in India and to the Indian businesses that extend the same benefit to others.

Kindly consider the following facts that support such a policy:

1. Domestic adoptions for the year 2006 are estimated by CARA (excluding state recognized adoption agencies) to be 2479 - reversing the trend of dropping numbers which has prevailed since 2002. Different sources state the number of available children for adoption in India to be between 12 million to 27000. This is the supply side of the equation.

2. The 2001 India census states that there are 230 million married couples. Even if one half of one percent is eligible to adopt, that number is 1.1 million couples. This is the demand side of the equation.

3. Per capita income in India (in 2005 - 2006) as per the Central Statistical Organization (CSO) is Rs. 20,734/-. As per CARA guidelines on costs for domestic adoptions, Shishu Grehs (government funded adoption agencies) can be reimbursed up to Rs. 15,000/- for maintenance and Rs. 9,000/- for medical expenses apart from Rs. 1200/ - towards registration and home study. This means that a child with medical needs could cost as much as Rs. 25,200/- which is far more than the average annual income of an Indian citizen.

4. The Ministry of Women & Child Development gives a grant of Rs. six lakhs per batch of 10 children up to the age of six to Shishu Grehs that exclusively promote domestic adoptions. In 2006 2007, Rs. 2.67 crores were disbursed to 35 NGOs in India. This could work as an implicit incentive for Shishu Grehs to keep the children from being adopted by Indian citizens.

The HOPE House is advocating the establishment in India of an ADOTION TAX CREDIT equivalent to the CARA stipulated maximum amounts (Rs. 25,200/-) per year. This is a win-win-win-win combination for the child in an adoption facility, the adoptive parent, the corporations and the government.

For example, if a child becomes eligible to be placed through adoption at the age of one and is placed in a home at the age of two, the government would save 2.4 lakhs of rupees (60000 rupees per child per year X 4 remaining years till the age of six) assuming that the child would have been left to remain at the orphanage till the age of six. By extending such a tax credit to a loving family, the governments expected loss of tax revenue is up to Rs. 25,200/- but their gain of 2.4 lakhs (from non disbursal of grants to Shishu Grehs) gives them a net saving of 2.16 lakhs of rupees per child.

The following undersigned support such a policy and it is my sincere plea to you and to your office that you will take this up with appropriate authorities and your colleagues to make a real difference in the lives of those that are most unfortunate and needs our support.