At a time when leading billionaires such as Warren Buffett and Bill Gates are trying to promote a global culture of philanthropy, the Indian economic elite has often been accused of sitting on its hands. On Wednesday, Wipro Ltd chairman Azim Premji broke that trend, when he transferred 213 million shares of his company, worth Rs8,846 crore, to a trust so as to fund the activities of the Azim Premji Foundation—a non-profit organization that works primarily in the field of education.
It’s a fine philanthropic contribution to an important sector that is, nonetheless, mired in governance and implementation failures. To be sure, the moral halo generated by this endowment will further Premji’s, and by extension Wipro’s, brand stature, which has relevance in a world increasingly concerned about the social good of business. But it has to be distinguished from run-of-the-mill corporate social responsibility drives.
There are two reasons why Premji’s gift stands out in Indian business history. First is its unparalleled scale. Rich captains of India’s industry have often in the past spoken about giving back to society. Some, to their credit, have also ventured into philanthropy. But the sheer size of Premji’s endowment dwarfs such earlier efforts. Second and more important is the irrevocable nature of the trust that the shares will go into, which ensures that it is protected against future tampering, even by Premji himself.
The implications are significant for India. At the last count, Forbes magazine found that there are 69 billionaires in the country, and that the 100 richest Indians are collectively worth a staggering $300 billion.
Yet only 26% of the country’s millionaires rank philanthropy among their top three spending priorities, according to a new Barclays Wealth survey; in comparison, 41% of US millionaires put philanthropy up there.
Premji’s endowment is also remarkable because he is a so-called “new” billionaire, and a lesson for inheritors of substantial wealth.
A dispensation in which inherited wealth is neither heavily taxed nor redistributed leads to the formation of an entrenched economic elite.
The increasing number of billionaires in a country such as India, where economic inequalities are still acute, is a worrying aspect.
It is too soon to say whether Premji’s efforts herald the arrival of Big Charity in India.
An important indicator will be the response to Gates and Buffett when they come knocking on the doors of Indian billionaires. But these efforts do set a benchmark that at least 68 other people in the country should aspire to live up to.
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