Bill Gates and Warren Buffett were in China last week to promote philanthropy, and they are expected to come to India in April. What sort of reception will they get here?
The two billionaires have already pledged to give away most of their substantial fortunes to charity. They have also been goading other fabulously rich men and women around the world to donate at least half their wealth to worthwhile causes. Fifty Chinese billionaires attended a successful dinner hosted by Gates and Buffett in Beijing, after initial fears that not too many would attend and agree to part with a slice of their money. It is to be seen how many Indian billionaires sign up for the philanthropy test in April.
There is big money out there. The Asia-Pacific Wealth Report 2010 published by Merrill Lynch and Capgemini says that there were 127,000 Indians with more than $1 million in investible assets in 2009, and they were collectively worth $477 billion. The latest list of the super rich brought out by Forbes magazine shows that India has a record 69 billionaires. The 100 richest Indians are worth $300 billion.
Even an average commitment to give away one-tenth of this pile— $47.7 billion or $30 billion, depending on which number you begin with— can make a huge difference. For example, the Indian government plans to spend $7.38 billion (Rs 33,214 crore) on primary education in the current fiscal year. Just think of what could happen if at least an extra $30 billion were available for primary education through philanthropy over a five-year period, say, through a mix of school building and education vouchers.
Commentary on the growing wealth of the richest Indians often involves an analytical error. Many writers compare wealth with gross domestic product (GDP) to make political points. The most recent example is an essay by writer Arundhati Roy: “(Hundred) millionaires hold assets worth 25% of our GDP.” That is highly misleading. Wealth and income are not strictly comparable. Wealth is what is accumulated over many years. GDP measures how much is produced in a single year in an economy, and that too in terms of value addition. The wealth of most people—not just Mukesh Ambani —is several times more than their annual income.
Calmer souls such as economist Raghuram Rajan also worry about the existence of such immense wealth in a poor country such as India. The way these fortunes have been made is also important. The list of Indian billionaires who have made their fortunes in areas where the government hand is most visible—real estate, mining, retailing, telecom and oil, for example —is too long for comfort. Those best placed to work the political system seem to have the best chances of getting ahead in India.
Gates and Buffett will come at a time when there are signs that genuine philanthropy is taking root in India. This philanthropy is quite different from corporate social responsibility, a fashionable public relations strategy funded by shareholder money rather than personal wealth. You should give from your pocket and the act of giving should ideally be without expecting anything in return. The Brihadaranyaka Upanishad exhorts human beings to develop the qualities of charity, compassion and self-control: Datta, Dayadhvam and Damyata, words that T.S. Eliot used in his most famous poem, The Wasteland.
The halo effect apart, Indian billionaires as a group may also have enlightened self-interest to consider. There are genuine worries about rising inequality and crony capitalism in India. There are early signs of a leftward shift in political discourse. Neither of these tides seems strong enough to undo economic reform or revive the destructive anti-rich rhetoric that we saw in the 1970s. Yet, Indian capitalism could be running into a legitimacy crisis and high-powered charity could play some role in polishing its image.
There is a close parallel with what happened in the US in the early decades of the 20th century. The early “robber barons” such as John D. Rockefeller and Jay Gould built the first great industrial enterprises in the country during the gilded age. Their business practices were red in tooth and claw, but there is little doubt that they helped the US emerge as the paramount economic power of the 20th century.
Their success did not save the robber barons from popular vilification. These men eventually gave away a lot of their wealth, especially in what is called the progressive era in US politics. They funded libraries, art galleries and universities across the country. It is impossible to figure out how much of this giving was to assuage guilt, how much was a ploy to deflect political pressure and how much was a pure attempt to share wealth with others. But Andrew Carnegie put it well: “The man who dies rich dies in disgrace.”
Niranjan Rajadhyaksha is managing editor of Mint. Your comments are welcome at email@example.com
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