The Hindu Business Line : Tax incentives for adoption

The Web site of CARA (Central Adoption Resource Agency) of the Ministry of Women and Child Development puts the number of domestic adoptions during 2006 as 2,479 — reversing the trend of dropping numbers since 2002. Going by the figures quoted by different sources, the number of children available for adoption in India ranges between 12 million to 27,000. Against these figures, the number of domestic adoptions per year is a drop in the ocean.

On the demand side, the 2001 census states that there are 230 million married couples. Even if one half of one per cent is eligible to adopt, that number is 1.1 million couples.

One of the chief reasons for poor adoption rates is economic in nature. Per capita income of India (in 2005-06) was Rs 20,734, according to the Central Statistical Organisation. As per CARA guidelines on the 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 1,200 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.

Also, the Ministry of Women and Child Development gives Sishu Grehs a grant of Rs 6 lakh for each batch of 10 children aged up to six to exclusively promote domestic adoptions. In 2006-07, Rs 2.67 crore was disbursed to 35 NGOs in India. But this could prove to be an incentive for Shishu Grehs to keep the children from being adopted.

The country needs a better mechanism that extends equal opportunity to all citizens to adopt, irrespective of their economic status, and an improvised grant-in-aid scheme.

One way could be to raise the `Adoption Tax Credit' (ATC) to Rs 24,000 (legally allowed amount for maintenance and medical expenses) to adoptive families and corporate houses; this could make adoption affordable both for the government and the family, and promote adoptions.

For the Government, the loss of tax would be more than compensated by the savings in grants.

Extending tax credit to individuals and the corporate sector makes it a win-win situation where the child has a loving home, the family has the support of the workplace (corporate), the corporate sector gains tax credit and the government saves money. However, as not many people in the lower income group work for corporate houses, it is important to ensure that such credit does not benefit only the rich. The Government could introduce an open access credit system where any tax-paying entity can enjoy the benefit, keeping in place checks and balances. Involving the corporate sector as a legitimate stakeholder also brings in much needed transparency into the concept of adoption

In 2001 and 2004, my wife and I had the joy and privilege to adopt our two girls while paying taxes to the American government. Their ATC was never our motivator but it undoubtedly made our journey easier with our personal finances not being thrown into disarray.

John F. Kennedy once said, "The rights of every person are diminished when the rights of one are threatened". After all, the child didn't choose not to have a home and the country should not deny him/her the same right lest, as JFK said, all of our rights will also be threatened.

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