The remarkable vision of Jamsetji Tata was but just one instance of the philanthropic urges of eminent Indians of that era.
The Benares Hindu University came about by the efforts of Pandit Madan Mohan Malaviya and Annie Besant, ably supported by a donation of land from the Maharaja of Kashi and Dharbanga. Aligarh Muslim University was spearheaded by Sir Syed Ahmad Khan and supported by several donors, including the then Aga Khan. Bombay was a great centre of philanthropy in the 19th century. The Gateway of India was built partly with money from David Sassoon, and if we go back to 1854, the Mahim Causeway linking Mahim to Salsette, was actually built by a donation from Lady Avabai Jejeebhoy.
Post-independent India, however, saw philanthropy on a rapid decline—the focus on the public sector and the alienation of the country’s business classes was not conducive to giving.
The rise of the nanny state also meant that it was expected to be the provider of all public goods and do all the social service. And finally, the extortionist levels of taxation imposed by the state crippled the entrepreneurial class, and business growth was akin to, to use an Indian expression, building a house with sand— money slipped away through your fingers.
This did not facilitate the generation of wealth, especially first generation wealth, which is so critical to philanthropy—the wealth of people who, in a free market, would have risen from humble beginnings and not forgotten what they left behind.
India post-1991 has been a different story. The freeing up of the economy through reforms has led to the flowering of a vast number of entrepreneurs from different backgrounds and regions. The fast growing economy, the development of a modern stock market and the flow of global capital has done wonders for India’s risk takers. This, along with the opening up of more and more sectors to private enterprise, has resulted in India having the largest number of billionaires in the developing world.
It has been fashionable to portray capitalism in India and elsewhere as “red in tooth and claw”, but the rise of a market economy is serving to make us more philanthropic, not less. The writer Andrew Sullivan has pointed out that no other country gives even half as much in charity as America, the most free-market nation in the world, does. Essentially, wealth and economic and social freedoms leave people with the means to do good.
Similarly in India, the number of charitable organizations began to explode at the same time in the 1980s that the market began to loosen up, and now there are close to 40,000 such Indian organizations, run primarily by individuals, private bodies and businesses.
Giving by Indians has certainly soared, but not enough. In a country with as much stark poverty and income disparity as India and which has just tentatively embraced free market ideology, it becomes all the more critical that the rich embrace philanthropy. It is the moral and ethical thing to do—but not only that. For the rich, philanthropy is also pragmatic.
As Adam Smith wrote, “No society can be flourishing and happy, of which the far greater part of the members are poor and miserable.” A democratic country where the majority of the people are still not well to do, and who have access to communication, will simply not countenance a situation where the rich seem to be little concerned about the lot of others.
Moreover, as the country asserts itself globally, the rest of the world will rightly expect that India solve its most pressing and endemic problems on its own, without recourse to aid and help from elsewhere. And as the performance gap between public governance and the private sector continues to grow, there will be more and more pressure on private actors to contribute and make a difference.
Philanthropy is also vital to making entrepreneurial capitalism acceptable to the people as the best form of the economy for the country.
The rapid rise of philanthropy among India’s business leaders is thus the fork in the road between India becoming a modern equitable free market democracy or going back to a stultifying socialistic state.
It is not that there is an absence of philanthropy. The money raised for tsunami relief in 2004 was, for instance, far more quickly and easily raised than in any previous calamity. A confident nation can far more easily be roused to respond to a tragedy.
The serial social entrepreneur Rajat Gupta, has been able to raise substantial amounts from Indian philanthropists for the Indian School of Business and the Public Health Foundation of India. And many prominent business families have done decades of great charitable work, quietly and without fanfare.
However, when you look at the scale of wealth created in India in the last few years, the giving simply does not compare. And when American universities limit the number of Indian students because their record as alumni donors is very low, it is a very telling comment!
If the 21st century truly has to be India’s century, then the rich will have to open their wallets wide open.
(Nandan M. Nilekani is the co-chairman of the board of directors of Infosys Technologies Ltd.)