Sex worker pay tax via unique savings scheme | india | Hindustan Times
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Sex worker pay tax via unique savings scheme

india Updated: Feb 05, 2009 01:16 IST
Aditya Ghosh
Aditya Ghosh
Hindustan Times
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They are not quite filing tax returns like their counterparts in Sweden, Canada and the Netherlands. But by becoming the first in their profession in India to pay tax in some form this year — on the interest they are earning through a unique savings scheme — sex workers strengthened their long-standing demand to be covered by the country’s labour laws.

Thousands of sex workers have paid a total of Rs 15,370 so far in taxes, on interest on their deposits in Sangini Mahila Cooperative Bank, which they started in July 2006 with US non-profit Population Service International.

This co-operative bank collects sex workers’ savings and deposits it with Bank of India, which deducted tax at source on the interest. The sum is insignificant; the act of paying it is not.

So impressed is Life Insurance Corporation with the micro-credit scheme that it has offered policies to more than 250 sex workers. The state-run insurer has offered policies to sex workers in only one other Indian city, Kolkata.

“The bank is doing a wonderful job,” said regional manager (LIC micro-finance division) D.S.Rawat. “It has a 49 per cent loan recovery record. That’s better than many commercial banks.”

In less than three years, the bank, which now has more than 3,200 account holders, has made a profit (unaudited) of Rs 5 lakh. It has deposits totalling Rs 2.29 crore.

The fact that sex workers are on the loan assessment committee has contributed to its success, particularly the impressive recovery rate, said Shilpa Merchant, regional director of Population Service.

The bank’s success has att-racted attention from far way. MBA students at Georgetown University, Washington, have developed a case study on Sangini, said Merchant. “We implemented some of their suggestions,” she said. “Now it is a self-sustaining model. We are not paying the salaries any more.”

For Tamanna and Maya, sex workers in their late 20s, collective action has given them some dignity. Tamanna recently paid back her loan to a moneylender who was charging 40 per cent interest, and took a loan from the bank at 16 per cent.

“The bank has given us security that we could never dream about,” said Maya.