India’s super-rich appear to be giving up on giving back

New Delhi: Ultra-high net worth individuals (UHNWIs), or those with a net worth of more than $50 million, in India, other than Wipro Ltd founder Azim Premji, are giving less than they did five years ago.

However, the number of UHNWI households has grown by 12% in this period, going by the findings of Bain and Co.’s India Philanthropy Report 2019.

Individual donations have been on the rise in India, but the amounts are not large enough. Contributions of ₹10 crore or more constitute about 55% of individual philanthropy, but Premji’s donations made through Azim Premji Philanthropic Initiatives Pvt. Ltd account for more than 80% of this. Excluding donations by Premji, such donations have declined by 4% in India since 2014, according to the report.

The social sector in India depends on funding from the government, private individuals, corporate houses and foreign sources. The government is the largest contributor to social sector funding, though private philanthropy is growing at a faster pace of 15% every year from 2014, compared to the government’s 10%. Foreign sources were hit in 2018 because of increased Foreign Contribution (Regulation) Act rules.

“Public infrastructure funding in sectors like education and health is woefully low, so UHNWIs must lead the way. In India, if you look at the rate at which net worth and gross domestic product are rising, giving by the top 800 families has not kept pace,” said Anant Bhagwati, partner at Bain and Co. and one of the authors of the report.

“This is particularly problematic, given that UHNWI households have grown at 12% over the past five years and are expected to double in both volume and wealth from 160,600 households with ₹153,000 crore combined net worth in 2017, to 330,400 households with ₹352,000 crore combined net worth in 2022,” the report says.

Most Indian UHNWIs—and a vast majority of them inherit their wealth—prefer to leave their money to family. In developed countries, billionaires tend to give away more of their wealth, in part because of tax regimes that favour philanthropy and the existence of social sector organizations that can run large projects, which have measurable impact.

India has pledged to meet the United Nations’ 17 Sustainable Development Goals (SDGs) by 2030. Bain estimates suggest that India needs about ₹26 trillion in annual funding to fulfil even five of the SDGs by 2030 (zero hunger, good health, quality education, gender equality, and clean water and sanitation).

“Even in the most optimistic scenario—in which India sustains its current economic growth rate and its current funding growth rate, all philanthropic capital is channelled towards the SDGs, there is no leakage in deployment, and the funding required to meet the SDGs doesn’t increase—the nation will still face an annual funding gap of around ₹4.2 trillion. Depending on how each of these factors evolves, the actual shortfall could be 2-4 times that amount,” the report said.