Philanthropy in India is likely to get a boost as benevolent billionaire Azim Premji plans to focus on charitable activities after retiring as the Executive Chairman and Managing Director of Wipro on July 31.
Premji, the second richest person in India, earned the tag of the country’s most generous billionaire in March 2019 after he committed to donate ₹1.45 lakh crore ($21 billion).
Having donated two-thirds of his wealth to charitable causes through the Azim Premji Foundation, the IT czar is one of the five largest private endowments in the world and the biggest in Asia.
In a letter to Wipro employees announcing his decision to step down, Premji said that he would devote more time to philanthropic activities through the Azim Premji Foundation, which now owns 67 per cent of the economic interest of Wipro. The Foundation is funded solely by Premji by way of transfer of his personal shares in Wipro. With the latest donation, Premji donated 34 per cent of his shares in the company.
“I will continue to serve on the Board of Wipro Limited while dedicating most of my time and energy to the philanthropic efforts of the Foundation,” Premji said. This means that India’s social sector funding may get a boost.
Social sector funding
The social sector in India depends on funding from the government, private individuals, corporate houses and foreign sources. The funds are used for the upliftment and the welfare of people in different fields such as education and health care.
In India, social sector funding continues to increase across the board. Overall, total contributions have grown at a rate of 11 per cent over the past five years.
While the government continues to be the largest contributor to social sector funding, hovering at about 6 per cent of the GDP, the expanding private philanthropy has outpaced public funding growth. Private philanthropy is growing at a pace of 15 per cent every year from 2014, compared to the government’s 10 per cent, according to Bain & Company’s India Philanthropy Report 2019.
The brightest spot: Individual philanthropists
Philanthropic funding or charity from individuals remains the brightest spot as currently they contribute about 60 per cent of the total private funding, estimated at ₹43,000 crore, as per the report. The segment has seen strong growth at 21 per cent per year in the past five years.
A significant portion of this comes from a few established figures who continue to lead individual giving. The list includes names such as the founder and Chairman of HCL, Shiv Nadar; Chairman and MD of Reliance Industries, Mukesh Ambani; and Chairman of the Piramal Group, Ajay Piramal.
In 2019, Premji became India’s top philanthropist after promising to donate ₹1.4 lakh crore. He makes up for about 80 per cent of large donations (above ₹10 crore) by ultra-high net worth individuals (UHNIs), which the report defines as individuals with a net worth of more than ₹25 crore ($3.6 million).