Home >Companies >News >To get people to give, impose an inheritance tax: Mohandas Pai

T.V. Mohandas Pai wears many hats. From the outspoken former chief financial officer and board member of Infosys Ltd and a part of several government committees, to a board member of the Securities and Exchange Board of India and the chairman of Manipal Global Education, he juggles multiple roles. But the one hat he has been wearing since 1999 is that of a philanthropist.

In 2000, Pai was responsible for setting up the Akshaya Patra Foundation, among the largest non-governmental organizations (NGOs) in India, and is now a trustee on its board. The NGO brings mid-day meals to 1.4 million children every day in government schools.

The 57-year-old, who says he gives away most of what he earns now, believes Indians are not giving as much they should. He spoke on why inheritance tax must come back, how NGOs should not play politics and why the culture of giving is dying in India. Edited excerpts from an interview:

Where does India stand with respect to philanthropy?

In our culture, giving was very much part of our tradition. But after the colonial period, we seem to have lost that culture. After India’s independence, (Jawaharlal) Nehru’s vision of the state playing a dominating role destroyed the culture of giving. In every society, people who are well-off have a natural obligation to take care of the deprived. That’s how you build a good society.

In the US, they practise compassionate capitalism, which means you take care of all your stakeholders, but you give away part of your wealth. That’s why the wealth creators in the US give away a lot of their money as opposed to Europe, which is feudal—they accumulate money to pass it on to their children.

In India, we are now going the European way, barring a few exceptions.

What do you think the philanthropy quotient is of business leaders in India?

With five being very good, I would give them one.

Today, there are about 65 billionaires in the country and they have $260 billion of wealth. Why can’t they give away 2% of it? We had a top tax rate of 40% that has been brought down to 30% (in 1997) by (former finance minister) Chidambaram.

So, the government has sent a message that we will reduce what we ask from you so you can be wealthy but, in turn, these people had an obligation to give, but the wealthy are not obliging.

If you look at 2% of $260 billion, it amounts to $5 billion or 30,000 crore. With this, about 50 crore (500 million) people can get medical insurance.

How do we encourage people to begin giving early?

I’m starting to believe that the only way to get people to give is to impose an inheritance tax. That will only force them to give. America has an inheritance tax, and that is forcing people to give when they are alive.

How do you convince people that it is an obligation to give?

I don’t like the word philanthropy because it has a connotation of patronage and feudalism. It says “I’m giving you something I own." You should remember that you are successful because of a variety of reasons, and so you have an obligation. You must give willingly as part of an obligation and not because you get the respect out of doing philanthropy.

What are the causes you support?

I have been giving since 1999, but, over the last six years, I give away most of the money I earn in a year and sometimes I sell assets to give away.

I feel I should do something for my country, so I fund Akshaya Patra. I feel I should do something for my state, so I’m part of Bangalore Political Action Committee (an action group that is aimed at enhancing the quality of life for citizens of Bengaluru), and I also want to do something for my community, so I run a large scholarship programme in Mangalore for about 6,000 Konkani-speaking children where we raise about 3 crore a year.

I also support other small programmes like building school rooms, scholarships on a need basis.

How much do you give away in a year?

I’m doing it for myself; I would not like to put a number to it. It is not a competition about who gives more than whom.

People cite lack of transparency among NGOs as a reason to not give.

It is just an excuse to not give. There are some very good NGOs and bad NGOs.

But there is a need to modernize NGOs…

Why can’t business leaders participate in modernizing them, instead of cribbing about lack of modernization?

NGOs have a significant role to play in society. There seems to be a sense that the government is persecuting a few of them...

I think it is a very wrong notion that the government is persecuting NGOs. There are NGOs that are into advocacy and are becoming lobbyists and NGOs that are trying to push their point of view.

These organizations, in turn, are funded by overseas money. Like the Kudankulam nuclear plant issue—it was not funded by Indians. We should be circumspect and look at this issue in a broad way.

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