FIRSTPOST BUSINESS (25 March 2013)
New Delhi: The richie-rich club of India may be lagging behind their Western counterparts when it comes to charity donations, but philanthropy in the country is gaining momentum through a different route, experts say.
As per US-based business magazine Forbes’ annual rankings of the world’s richest people, there a total of 55 billionaire in India, making it the fifth biggest country in terms of number of people with at least one billion dollar networth.
However, India lags behind many of its Western peers when it comes to charitable donations by the rich citizens.
According to the latest India Philanthropy Report by global consultancy firm Bain and Company, the wealthy Indians shelled out 3.1 percent of their total income on charitable donations in 2011, compared to 2.3 per cent in 2010.
Despite a year-on-year rise, the figure is low in comparison to many other countries. The affluent people in the US give as much as 9.1 per cent of their income in donations.
According to non-profit organisation Smile Foundation India Co-Founder & Executive Trustee Santanu Mishra, many of the rich Indians have off late started thinking about charity and giving back to the society, though in a small way.
Most of the newly rich individuals acquired such level of resources for the first time in life which had not been passed on to them from previous generations in comparison to their western peers,” Mishra said. “Hence their priority is to enjoy these hard earned resources first and get it utilised for their children,” he said, while adding that Indians have traditionally been more inclined to religious donations, rather than social issues.
The experts also say that one of the big barriers to philanthropic giving in India has been the NGOs lacking in terms of scale of operations, among other issues. However, a significant charitable momentum is building in
India, said Arpan Sheth, Bain & Company partner in Mumbai and author of its India Philanthropy report.
“Two-thirds of all surveyed expect to increase donations in the next five years, with two in five saying they will increase giving by over 20 per cent in that period,” he said. Traditionally, philanthropic activities in India have
included building religious places and funding universities.
Besides, most of the country’s big conglomerates, such as Ambanis, Tatas and Birlas, have their trusts for charitableneeds and the individual philanthropy is not very common.
On the lines of routes followed globally by the likes of Warren Buffett and Bill Gates, IT major Wipro’s chief Azim Premji recently became the first Indian to sign up for the global ‘Giving Pledge’ initiative. The Giving Pledge is an initiative where the world’s richest families pledge to donate at least half of their wealth to charity.