Are Indian billionaires less large-hearted than their US counterparts?
Or do India’s super rich operate in a social context that’s very different from the one in which a Bill Gates or a Warren Buffett pledges his fortunes — the world’s second- and third-largest, respectively — to charity?
Wipro chairman Azim Premji, India’s third-richest man, recently raised the bar for his fellow Indian billionaires by committing Rs 8,846 crore (almost $2 billion, or about 9 per cent of his wealth) to charity.
But his example is not something that others seem eager to emulate.
Queries on philanthropy from Hindustan Times to 12 of the 20 richest Indians (according to the Forbes 2010 list of billionaires) worth between $27 billion (Rs 1.24 lakh crore) and $3.4 billion (Rs 15,640 crore) went largely unanswered, revealing, perhaps, that the idea and trend of business tycoons giving away their wealth (or large portions of it) to philanthropy has not yet caught up in India.
This may seem a little ironical in a country where an average 9% growth over the last six years, and the resultant stock market boom, has made millions of Indians rich and propelled 69 tycoons into the Forbes list of billionaires in 2010 (up from 52 last year).
At the same time, there are reports that between 60% and 80% of Indians live on less than Rs 20 a day.
When HT asked if they were willing to donate a part of their wealth to charity, none except one of the top 10 billionaires (according to Forbes 2010) and five from the next 10 responded.
Said Anil Agarwal, chairman of Vedanta Resources: “I believe a systematic approach towards socio-economic development in rural areas by corporates brings large scale benefits. The examples of Warren Buffett and Bill Gates should inspire others.”
He points to his ‘commitment of $1 billion (Rs 4,600 crore)’ towards building a world-class university (Vedanta University) in Orissa, carefully skirting a direct answer to the question and to reports that the plans for the university have been scaled down.
In contrast, over the past few months, 40 of America’s richest have pledged large portions of their wealth to philanthropy in response to ‘The Giving Pledge Campaign’ launched by Buffett and Gates.
The Indian context
Dipankar Gupta, noted sociologist and former professor at Jawaharlal Nehru University, said Indian family commitments and the absence of a comfort factor — that a corrupt state and society would not squander away their hard-earned wealth — may be important factors coming in the way of Indian billionaires giving away their fortunes.
“Indians preserve wealth for parents and children,” he said. Then, in India, wealth is often owned by the entire family and not by an individual. This is a social issue that US billionaires don’t have to face. So, Indian billionaires may not be in a position to give away family fortunes even if they want to.
Added Gupta: “For charity to thrive, there should be trust in society. If the state’s conduct is not trustworthy, people will be wary of giving away large amounts as there is no guarantee that the money will be utilised for the purpose for which it has been given.”
Business historian Gita Piramal stressed cultural issues as well. “From the Tatas, Birl as, Bajajs to small businessmen, India has history of philanthropy. But unlike in the West, donations here are largely given silently.”
About two-thirds of Tata Sons, the Tata Group’s holding company, is owned by various Tata trusts that use the money to fund educational, medical and other charities. The Birlas, likewise, run large religious, educational and medical charities across the country without much fanfare.
And though Tata Group chairman Ratan Tata announced a $50-million (Rs 230 crore) endowment for Harvard University, to which Mahindra & Mahindra vice-chairman Anand Mahindra had earlier given $10 million (Rs 46 crore) and several others are doing their bit for the less privileged within India also, the proportions are still miles short of what the Buffett-Gates campaign wants the rich to do.
In China, where the socio-cultural context is somewhat similar to (but not the same as) India, there were reports that many Chinese billionaires skipped a charity dinner recently hosted by the Buffett-Gates duo as they feared that they could be asked to pledge their fortunes to charity.
“The idea behind The Giving Pledge Campaign is beautiful, but how can there be a standard model for philanthropy?” asked Mandakini Sud, spokesperson for Lakshmi Mittal, chairman, Arcelor-Mittal.
“It is premature to commit an amount as Mittal is still operating actively. We are adhering to our commitments … and don’t have to publicise or derive mileage from them,” she added.
“The 10 richest Indians committing a quarter of their wealth (to charity) can change the face of our country. But along with money should come their time and commitment to evolve solutions for challenges (that the less fortunate face),” said Venkat Krishnan, CEO, Give India, a (NGO) platform facilitating support to NGOs.
Clearly, India’s billionaires can do a lot more for society than they are doing now.
There are reports that Buffett and Gates plan to visit India to encourage Indian billionaires to share their wealth with society. They will do well to keep India’s unique social and cultural context in mind.