Did India Inc Thumb Its Nose at Gates & Buffett 28 Mar 2011.Cdr
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THE ECONOMIC TIMES All Editions, Monday, March 28, 2011 Imperatives of Reaping 10% Agriculture Growth Yes. India gives in its own way & can’t write fat cheques as it’s still an emerging economy TEAM ET India Inc’s View Has the majority of India's billionaires taken a leaf out of Sam Walton's autobiography on Giving Made in America? Walton, co-founder of the world's largest retail chain Wal-Mart, India has a culture of giving famously wrote in his 1992 tome: “Wal-Mart since the time of Buddha really is not, and should not be, in the charity business...We have never been inclined to The nature of philanthropy is give any undeserving stranger a free ride.” A few days ago, when Bill and Melinda different from what it is in Gates along with Warren Buffett got down the US to dining with India's loaded lot in the capital with a plea to be generous in Indian businesses are in a philanthropy, barely a dozen of the phase of wealth creation; country's 55-odd billionaires attended. The richest of them, Mukesh Ambani, preferred philanthropy will follow to watch India beat Australia in the ICC Cricket World Cup some 1,000 km away at Develop effective models for Motera in Ahmedabad. Does it mean Indian charity - just bland donations billionaires are indifferent to the cause of Melinda and Bill Gates at a village in Bihar may not be enough giving and only interested in creating wealth? nature of philanthropy in India and in the Americans to tell us.” We give without making a West could not be more different. Says Adds Harsh Goenka, Chairman, RPG That may be an unfair conclusion. For many Yusuf Hamied, Chairman & Managing show of it; and we do it our reasons. The main one: If India's super-rich Enterprises: “Our group's charity is not Director, Cipla: “Philanthropy in the First about writing fat cheques. It hinges on way do not want to take the Gates-Buffett 'giving World and in the Third World are two Pledge', it does not mean that they do not e d u c a t i o n , e m p l o y a b i l i t y a n d different things. In the First World, people environment.” That India's businesses are Why wait to be a billionaire give. As Rahul Bajaj, chairman, Bajaj Group, donate to build a baseball stadium. In India says: “India has a very old culture of giving, predominantly family-owned might also to give we have to decide for ourselves what we mean that they have to first think about the since the time of Buddha. The concept of want out of philanthropy. It is not for the philanthropy is not new to us.” Also, the brood before they look outward. Importance of Family Ties A number of businessmen ET spoke to surprise, surprise: None of the Waltons “About 75% of India's wealth comes from find his own pattern in terms of what talked about the importance of family ties figure amongst the 59 American billionaires the new business families and India has to percentage he would like to give and what and the tendency of patriarchs to feel who have pledged to salt away a majority of go through its philanthropy evolution yet,” model he would like to follow. responsible for their children and their cache of greenbacks for philanthropy. says YES Bank's Kapoor. That evolution is Industrialist Ajay Piramal, along with a few grandchildren. By then, there may be little to That does not make the Waltons a close- beginning to happen in newer businesses more family business chiefs who met the go around for charity. Says Venkat Krishnan fisted family that refuses to think beyond the where promoters are developing their own Gateses and Buffett, has been inspired to N, Director, GiveIndia: “We have a strong clan. Sam's wife Helen, who died in 2007 and models for giving. consider flagging off a 'Givers Club,' on the 'family and inheritance culture where we at one time was the richest woman in the The GVK group registered the GVK lines of the one formed by US billionaires. like to leave everything for our children.” world, chalked out a chunk of her stake in Foundation in 2001 to promote healthcare, Comparisons with the US do not serve a This is radically different from the US value the retailer for charity. A recent article in The education, arts, music, sports, amongst purpose because, as Piramal pithily puts it: system where the Nextgen is expected to be Chronicle of Philanthropy points out that other activities. Biocon's Mazumdar-Shaw “People in the US today have more wealth independent. “It will take a while for this to “second only to the Bill & Melinda Gates says most of her dividends — of 40-50 crore than people in India will have in a long change,” adds Krishnan. Foundation in its spending to overhaul — since Biocon went public, have been time.” SRF Ltd Chairman Arun Bharat Ram Perhaps it may not take that long. The schools, the Bentonville, Arkansas, grant invested in philanthropy. “This year I want says Americans prefer to give to charity average net worth of India's billionaires is maker has long shunned publicity.” to set up a cancer insurance fund,” she adds. because of the high inheritance tax levels in pegged at $4.5 billion — that should be According to the Chronicle, The Walton Says Thermax's Aga: “We very recently that country. “It is not fair to make a value adequate to take care of a few generations of Family Foundation gave $378 million in decided that 30% of our yearly dividend judgement that we (Indian businessmen) do the family as well help in improving the lives 2009, the most recent year for which data income (our only source of earning) will be not do enough in terms of philanthropy,” of a sizeable portion of India's 450 million was available. given to philanthropy.” Technology czar adds Ram. Yet, what could help India gain living in poverty. As TV Mohandas Pai, That may still be loose change compared to Shiv Nadar has committed to put aside well respectability on the giving front is the sheer director on the Infosys Technologies board, the kind of giving the Gates-Buffett duo is over 10% of his wealth for philanthropic number of entrepreneurs entering the says: “If you have billions of dollars, which I championing. Yet, the short point is: The ventures. Nadar's personal wealth, based system and the high growth rates being think many Indians have, I don't think Waltons do give. The shorter point: Family only on his shareholding in listed enjoyed in various industries. And CK giving 50% will make such a big difference. businesses, including some in India, do give. companies, including HCL Technologies Ranganathan, CMD, CavinKare, feels the “Yet, Indian businessmen — at least those Many of them do it, along with a few and HCL Infosystems, is pegged at about fixation that only billionaires can donate that are the product of a more liberal and professionals, quietly. And in their own 15,000 crore. needs to be dealt with. faster growing economy — might feel that ways. Says Goenka: “When people like In the next five years, his philanthropic “You can't quantify how much money you this might just be their time to create wealth. Azim Premji, Narayana Murthy, Vineet educational projects will entail an need before you start becoming charitable,” The phase of giving can come later. “The Nayar, Kalpana Morparia and Hemendra expenditure of 4,000 crore. He sold a 2.5% he explains. For charity to be effective it concept of philanthropy is really nice, but for Kothari do charity, they never ask for equity in HCL Technologies last June and needs to be done smartly. Devi Shetty, that people in our country first need to create publicity.” Adds Rana Kapoor, Founder and pumped the entire Rs 585 crore proceeds founder of Narayana Hrudayalaya, says: wealth themselves,” says KP Singh, Managing Director, YES Bank: “I do charity into his philanthropic efforts. The 60-year- “We do not need to donate money in order to Chairman, DLF, India's largest realty firm. in memory of my father and would like to old Grandhi Mallikarjuna Rao, founder of do charity because that model cannot be Analysts also point out that 80-yearold keep it personal.” Kapoor is just one of the Bangalore-based infrastructure firm GMR scaled up. One has to come up with models Buffett has made the transition from many entrepreneurs who have struck pay Group, recently pledged 1,540 crore ($340 that are sustainable and we have to relook investor and industrialist to philanthropist dirt in the past decade. Before that, and million) to create an endowment for the concept of charity.” Shetty gives the over decades. After all, he became a before liberalisation and the dismantling of humanitarian activities. Rao has committed example of shops in Commercial Street (a millionaire way back in the early 60s and a the licence raj in the 90s, few industrialists his funds to the Group's charitable wing downtown shopping quarter in Bangalore) billionaire in 1990, a time when wealth were in a position to create real wealth. GMR Varalakshmi Foundation. The grant is that pool in money to sponsor 60-70 heart creation was a mirage in India Inc. Opportunities were few, capital was scarce equivalent to Rao's personal share in the surgeries for children every month.