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The giving's not easy here

india Updated: Oct 18, 2010 23:16 IST
Hindustan Times
Ratan Tata

Indian businessman Ratan Tata has made a $50 million donation to Harvard Business School, one of the largest individual endowments the US school has ever received. Earlier, Mr Tata, through a family trust, had donated $50 million to his alma mater, Cornell University.

In between, Anand Mahindra donated $10 million for a humanities centre at Harvard.

It is praiseworthy that India's richest corporate chieftains are endowing educational institutions with such generosity. Whether they give in India or overseas is a moot point, giving is a personal decision and rightly giving is not seen as being constrained by borders.

India is experiencing a nascent culture of corporate philanthropy. Several big business houses were synonymous with corporate philanthropy at one time. But during the country's socialist heyday, this culture died out, not least because of a sense that social welfare was the monopoly of the state.

Post-liberalisation India has seen a resurgence of corporate giving. Almost every information technology corporate head has established a foundation to promote education. A 2006 study by Bain & Company indicated how long a path lies ahead.

Philanthropic donations in India are about 0.6 per cent of gross domestic product and, of this, only a tenth is from corporations and individuals. America's figures are 2 per cent and 75 per cent, respectively. However, India is well ahead of other emerging economies like Brazil and China.

Former Infosys tsar Nandan Nilekani, for example, gave $5 million to his alumni IIT, Mumbai in 2000. The Tatas, too, have given generously to institutions of academic excellence in India.

While there are strong cultural reasons why America has such a strong philanthropic culture, a key reason is strong institutional support in the form of tax breaks and administrative receptivity. This is largely lacking in India.

The fact is that no one would feel confident about donating millions to many Indian educational institutions. Most of them lack detailed plans for absorbing even smaller amounts of money and even fewer can provide audit trails for how they use their money.

The Human Resources Development ministry is infamous for finding bureaucratic means to either deter such donations or redirect the funds to itself. A culture of obstruction is often replicated at the local level.

Telecom magnate Sunil Mittal once noted that Africa had better philanthropic programmes than India.

Experts say it can take a century to develop a culture of giving at the civil society level.

At a time when its private sector is growing and individual wealth is rising at such a rapid clip, India can greatly advantage itself as a nation by telescoping this process by making itself a more comfortable and painless place to give.

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