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Why India’s wealthy happily donate to god and govt but loathe helping needy and poor

Be it Amitabh Bachchan or Virat Kohli, India’s rich and famous are quick to lecture or follow PM Modi’s diktat. But selfless charity is missing among most Indians writes KAVEREE BAMZAI in The Print


Migrant workers in Delhi trying to get back to Uttar Pradesh amid the nationwide Covid-19 lockdown | Photo by Suraj Singh Bisht | ThePrint


The modern world is facing its worst crisis in coronavirus pandemic and what are Indian celebrities doing? Well, many clapped and banged pots and pans on 22 March at 5 pm following  Prime Minister Narendra Modi’s call, and filmed themselves while doing so. Others are showing us how to do dishes and clean the home, participating in mock celebrity bartan-jhadu-poncha (BJP) challenges. The rest of the world is trying to help find a cure for the deadly virus or providing monetary assistance to the poor or arranging equipment for medical workers, underlining yet again the generosity gap between other countries’ and India’s elite.

Tennis star Roger Federer donates $1.02 million to support the most vulnerable families in Switzerland during the coronavirus crisis; India’s former cricket captain Sourav Ganguly gives away Rs 50 lakh worth of rice in collaboration with the West Bengal-based company Lal Baba Rice, in what is clearly a sponsored, mutual brand-building exercise. Chinese billionaire Jack Ma donates one million face masks and 500,000 coronavirus testing kits to the United States, and pledged similar support for European and African countries; Amitabh Bachchan uses social media to spread half-baked information — such as ‘flies spread coronavirus’ — and wonders if the clanging of pots, pans and thalis defeats the potency of the virus because it was Amavasya on 22 March (he later deleted the tweet).

Hollywood’s golden couple Blake Lively and Ryan Reynolds announce they will donate $1 million to Feeding America and Food Banks Canada that work for low-income families and the elderly; while Indian cricket and Bollywood’s beautiful match Virat Kohli and Anushka Sharma get into familiar lecture mode, asking everyone to “stay home and stay safe”. This follows Anushka Sharma’s earlier run-in with a ‘luxury car’ passenger where she ticked him off for violating PM Modi’s diktat of Swachh Bharat. 

Where the rich are charitably poor

What makes rich and famous Indians so quick to lecture, especially on issues in congruence with government initiatives, but so loathe to help the poor desperately in need? The 2010 Giving Pledge by Warren Buffet and Bill Gates, to which five wealthy Indians are signatories, was meant to give a gigantic push to philanthropy worldwide. This was followed by India’s then minister of corporate affairs Sachin Pilot making it legally mandatory for companies to put aside charity funds for Corporate Social Responsibility (CSR) projects, making India the first country in the world to pass such a legislation. This year, an attempt to criminalise non-compliance was eventually softened after an uproar from corporates.

Philanthropy is up. According to Bain and Company’s annual Philanthropy Report 2020, domestic philanthropic funding has rapidly grown from approximately Rs 12,500 crore in 2010 to approximately Rs 55,000 crore in 2018. Contributions by individual philanthropists have also recorded strong growth in the past decade. In 2010, individual contributions accounted for 26 per cent of private funding, and as of 2018, individuals contribute about 60 per cent of the total private funding in India, estimated at approximately Rs 43,000 crore.

But in a prophetic warning, the report underscored the need for philanthropy ”to now consciously focus on India’s most vulnerable” and called for targeted action for the large population caught in a vicious cycle of vulnerability — precisely those worst hit by the coronavirus pandemic.

“The disadvantaged,” it said, “are unable to adapt to unpredictable situations that can push them deeper into vulnerability, such as climate change, economic risks and socio-political threats.” Even Azim Premji, who recently made news by committing 34 per cent of his company’s shares — worth $7.5 billion or Rs 52,750 crore — to his continuing cause, the public schooling system in India, has not set aside anything specific for those affected by the coronavirus. India’s second-richest man was the first Indian to sign The Giving Pledge.

Vaishali Nigam Sinha, Chief Sustainability Officer at Renew Power, started charity a few years ago to promote giving. Her experience has been less than happy. Indians, she finds, have refrained from planned giving for broader societal transformation. “Giving is individualistic and not driven via networks, which can be quite effective as we have seen in other parts of the world like the Bill and Melinda Gates Foundation. And in India, giving is usually done to get something back – to god for prosperity, to religious affiliations for advocacy of these platforms, and to government for business returns. Wealthy Indians need to learn to give in a planned way for greater social impact and transformation,” she says.

Little surprise then that India was ranked 124 in World Giving Index 2018 — and placed 82 in the 10th edition of the index compiled by Charities Aid Foundation looking at the data for 128 countries over the 10-year period. 

All of us are in the same boat

But it’s not about celebrities or wealthy Indians alone. We are all in it together. Special planes are sent to bring back Indians stuck abroad due to the pandemic, but labourers and daily wage workers are left to walk hundreds of kilometres to reach their villages. Doctors treating coronavirus patients will be applauded but not allowed to enter their homes.

JNU sociologist Maitrayee Chaudhuri calls it a potent mix of selfishness, self care and entitlement. ”We have a complete disregard for people on the margins and on whose labour we sit. It is all about us and our safety,” she says. This communal selfishness is very different from the churning in the 19th and early 20th century, which led to enormous social reform movements. The slow and meticulous destruction of ‘secularism’, ‘socialism’ and ‘liberalism’ has helped. As has the rise of neoliberal ‘individual self centredness’. “Not to talk about smartphone dumbness,” she adds. There is an absence of empathy everywhere, filled instead with the noise of thalis being banged and bells being rung to show symbolic gratitude to those who serve us.

The examples of those who are giving are few and far in between. There is comedian Kapil Sharma, who is giving Rs 50 lakh to the Prime Minister’s Relief Fund and southern superstars Pawan Kalyan, Ram Charan and Rajinikanth. But in general, our stars have chosen to share very little. Former cricket captain M.S. Dhoni, for instance, has been reported to have donated Rs 1 lakh to a charity trust in Pune, which led to some criticism and a counter from his wife Sakshi, even though it wasn’t immediately clear which incident she was alluding to.

India Inc hasn’t fared much better either. When PM Modi asked everyone to show their support for health workers fighting coronavirus by applauding them, one of the country’s most proactive industrialists was among the first to tweet his support, and also one of the first to be trolled for it. He quickly responded by offering to manufacture ventilators, among other things. Reliance is reportedly donating a hospital for coronavirus patients, weeks after Isha Ambani had hosted a Holi party on 7 March — when the number of coronavirus cases had rapidly begun to rise. Her mother, after all, is the queen of giving, contributing to an array of eclectic causes, and has been honoured for it by getting elected to the board of New York’s Metropolitan Museum of Art in 2019 or by becoming the first Indian woman in 2016 to be elected to the International Olympic Committee for supporting the sporting dreams of seven million Indian children.

But for India’s corporate class, it took a nudge from the Principal Scientific Adviser K. Vijay Raghavan to remind them that healthcare and preventive healthcare are covered under Schedule VII of the Companies Act: “Hence supporting any project or programme for preventing or controlling or managing COVID19 is legitimate CSR (CSR) expenditure.” He also quickly got an office memorandum issued by the Ministry of Corporate Affairs a day later. 

Elites’ capitalist worldview

Is there a kindness deficit in India’s business elite as well, which mirrors the lack of empathy of the country’s middle class? Business writer and bestselling author Tamal Bandyopadhyay says there are exceptions but culturally, the Indian business community is not exactly fond of opening up its purse on its own unless there is a compulsion. “Even when the companies are compelled, they find ways to evade it. We all know how many of them handle their CSR activities through creation of trusts. When it comes to buying electoral bonds, the story is different.

“Similarly, some of them get excited and rush to do certain things to express solidarity with the government in power. For instance, when the push is on digitalisation, there are takers for adopting towns for digitalisation in constituencies which matter. Essentially, most of them don’t believe in doing things no strings attached. Of course, there are people who believe in doing things quietly but they are exceptions,” he says.

In Western nations such as the US, philanthropy has deeper roots, with the practice essentially starting through donations to religious organisations. By the late 19th century, there was a rise of secular philanthropists such as Andrew Carnegie and John D. Rockefeller, which Stanford professor Rob Reich has noted as being controversial and one way of cleansing one’s hands of the dirty money.

In his book Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better (2018), he has noted: “Big Philanthropy is definitionally a plutocratic voice in our democracy, an exercise of power by the wealthy that is unaccountable, non-transparent, donor-directed, perpetual, and tax-subsidised.”

A similar critique has come from Anand Giridharadas, whose Winners Take All: The Elite Charade of Changing the World makes the argument that the global financial elite has reinterpreted Andrew Carnegie’s view that it’s good for society for capitalists to give something back to create a new formula: It’s good for business to do so when the time is right, but not otherwise. According to Reich, philanthropy works when it is able to find a gap between what governments do and what the market wants.

Few people exemplify this better than Bill Gates, who has for long donated to the cause of global healthcare. The Bill and Melinda Gates Foundation has already contributed $100 million to contain the virus, which he declared a pandemic even before the World Health Organisation did. The Foundation’s newsletter The Optimist is also performing a key role in spreading critical information about the Covid-19 pandemic and dispelling myths. 

Indian philanthropy isn’t secular

In India, the twain of religious giving and secular funding has not met. Management expert Nirmalya Kumar calls it a sensitive subject and says it is related to the philosophical concept underlying Indian religions such as Hinduism, Buddhism and Sikhism that believe in reincarnation. “Our soul starts life again in a different physical form based on the karma of previous lives. As such, as has been sometimes articulated to me, the lack of charity is an unwillingness to interfere with the consequences that God has determined appropriate. Who am I to come in between the person and their God?”

But the Rashtriya Swayamsevak Sangh (RSS) is traditionally known for engaging in social seva (not just swayam seva , or self service), evidenced by the Bharatiya Janata Party (BJP)’s decision to feed five crore people during the 21-day lockdown. Sikhism has a well-developed tradition of Guru ka langar, and it was on full display at Shaheen Bagh when ordinary Sikhs served food to people protesting against the Citizenship Amendment Act (CAA) and the National Register of Citizens (NRC).

Some business families also do philanthropic work, among them the Nilekanis, the Murtys and the older Bharatrams (their founder Lala Shri Ram founded Delhi Cloth Mills and set up several educational institutes like Shri Ram College of Commerce and Lady Shri Ram College). Radhika Bharatram, joint vice chairperson, The Shri Ram Schools, recalls growing up in a middle class, progressive home where her sister and she were encouraged to volunteer at the Cheshire Home and Mother Teresa Home. Marriage, she says, brought her into a home where making contributions to society was in the family’s DNA and she is now involved as a volunteer with organisations such as Delhi Crafts Council, Blind Relief Association, SRF Foundation, the CII Foundation Woman Exemplar Programme, and Cancer Awareness Prevention and Early Detection. What drives her is empathy: When “you come from a position of privilege, there is joy in making a difference to someone else’s life”. She says it motivates her when the purpose is greater than the individual.

Unfortunately, the middle class and the elites have tended to keep self interest above public interest. In the new world after the coronavirus pandemic, this is one attitude it must change.

Post-crash economics: some common fallacies about austerity

Propositions in economics are rarely absolutely true or false – what is true in some circumstances may be false in others

• 
• • Robert Skidelsky
  • theguardian.com, Thursday 21 November 2013 16.29 GMT

Two Swabian housewives in Germany. 'One should simply have asked the Swabian housewife,' said German chancellor Angela Merkel after the collapse of Lehman Brothers in 2008. 'She would have told us that you cannot live beyond your means.' Photograph: Frederick Florin/AFP

The period since 2008 has produced a plentiful crop of recycled economic fallacies, mostly falling from the lips of political leaders. Here are my four favourites.

The Swabian Housewife: "One should simply have asked the Swabian housewife," said German chancellor Angela Merkel after the collapse of Lehman Brothers in 2008. "She would have told us that you cannot live beyond your means."

This sensible-sounding logic currently underpins austerity. The problem is that it ignores the effect of the housewife's thrift on total demand. If all households curbed their expenditures, total consumption would fall, and so, too, would demand for labour. If the housewife's husband loses his job, the household will be worse off than before.

The general case of this fallacy is the "fallacy of composition": what makes sense for each household or company individually does not necessarily add up to the good of the whole. The particular case that John Maynard Keynes identified was the "paradox of thrift": if everyone tries to save more in bad times, aggregate demand will fall, lowering total savings, because of the decrease in consumption and economic growth.

If the government tries to cut its deficit, households and firms will have to tighten their purse strings, resulting in less total spending. As a result, however much the government cuts its spending, its deficit will barely shrink. And if all countries pursue austerity simultaneously, lower demand for each country's goods will lead to lower domestic and foreign consumption, leaving all worse off.

The government cannot spend money it does not have: This fallacy – often repeated by British prime minister David Cameron – treats governments as if they faced the same budget constraints as households or companies. But governments are not like households or companies. They can always get the money they need by issuing bonds.

But won't an increasingly indebted government have to pay ever-higher interest rates, so that debt-service costs eventually consume its entire revenue? The answer is no: the central bank can print enough extra money to hold down the cost of government debt. This is what so-called quantitative easing does. With near-zero interest rates, most western governments cannot afford not to borrow.

This argument does not hold for a government without its own central bank, in which case it faces exactly the same budget constraint as the oft-cited Swabian housewife. That is why some eurozone member states got into so much trouble until the European Central Bank rescued them.

The national debt is deferred taxation: According to this oft-repeated fallacy, governments can raise money by issuing bonds, but, because bonds are loans, they will eventually have to be repaid, which can be done only by raising taxes. And, because taxpayers expect this, they will save now to pay their future tax bills. The more the government borrows to pay for its spending today, the more the public saves to pay future taxes, cancelling out any stimulatory effect of the extra borrowing.

The problem with this argument is that governments are rarely faced with having to "pay off" their debts. They might choose to do so, but mostly they just roll them over by issuing new bonds. The longer the bonds' maturities, the less frequently governments have to come to the market for new loans.

More important, when there are idle resources (for example, when unemployment is much higher than normal), the spending that results from the government's borrowing brings these resources into use. The increased government revenue that this generates (plus the decreased spending on the unemployed) pays for the extra borrowing without having to raise taxes.

The national debt is a burden on future generations: This fallacy is repeated so often that it has entered the collective unconscious. The argument is that if the current generation spends more than it earns, the next generation will be forced to earn more than it spends to pay for it.

But this ignores the fact that holders of the very same debt will be among the supposedly burdened future generations. Suppose my children have to pay off the debt to you that I incurred. They will be worse off. But you will be better off. This may be bad for the distribution of wealth and income, because it will enrich the creditor at the expense of the debtor, but there will be no net burden on future generations.

The principle is exactly the same when the holders of the national debt are foreigners (as with Greece), though the political opposition to repayment will be much greater.

Economics is luxuriant with fallacies, because it is not a natural science like physics or chemistry. Propositions in economics are rarely absolutely true or false. What is true in some circumstances may be false in others. Above all, the truth of many propositions depends on people's expectations.

Consider the belief that the more the government borrows, the higher the future tax burden will be. If people act on this belief by saving every extra pound, dollar, or euro that the government puts in their pockets, the extra government spending will have no effect on economic activity, regardless of how many resources are idle. The government must then raise taxes – and the fallacy becomes a self-fulfilling prophecy.

So how are we to distinguish between true and false propositions in economics? Perhaps the dividing line should be drawn between propositions that hold only if people expect them to be true and those that are true irrespective of beliefs. The statement, "if we all saved more in a slump, we would all be better off," is absolutely false. We would all be worse off. But the statement, "the more the government borrows, the more it has to pay for its borrowing," is sometimes true and sometimes false.

Or perhaps the dividing line should be between propositions that depend on reasonable behavioural assumptions and those that depend on ludicrous ones. If people saved every extra penny of borrowed money that the government spent, the spending would have no stimulating effect. True. But such people exist only in economists' models.

So how long can the US hold the world to ransom with the dollar?

Satyajit Das

On 8 November 2010, the German finance minister Wolfgang Schäuble told the Wall Street Journal: "The USA lived off credit for too long, inflated its financial sector massively and neglected its industrial base."

US gross government debt currently totals around $16trillion (£10trn). The US government holds around 40 per cent of the debt through the Federal Reserve and government funds. Individuals, corporations, banks, insurance companies, pension funds, mutual funds, state or local governments, hold 25 per cent. Foreign investors, China, Japan and "other" (principally oil exporting) nations, Asian central banks or sovereign wealth funds hold the rest.

Historically, America has been able to run large budget and balance of payments deficits because it had no problem finding investors in US Treasury securities. The unquestioned credit quality of the US, the unparalleled size and liquidity of its government bond market, ensured investor support. Given its reserve currency and safe haven status, US dollars and US government bonds were a cornerstone of investment portfolios of foreign lenders.

During this period, emerging countries such as China fuelled American growth, supplying cheap goods and cheap funding – recycling export proceeds into US bonds – to finance the purchase of these goods. It was a mutually convenient addiction .

Asked whether America hanged itself with an Asian rope, a Chinese official told a reporter: "No. It drowned itself in Asian liquidity."

Given the sheer quantum of US debt, foreign investors may become increasingly less willing to finance America. Japanese and European investors, struggling to finance their own government obligations, may simply not have the funds.

Given its magnitude and the lack of political will to deal with the problem of debt and public finances, the US is now deploying its FMDs – "financial extortion", "monetisation" and "devaluation" – to finance its requirements.

In a form of extortion, existing investors like China must continue to purchase US dollars and bonds to avoid a precipitous drop in the value of existing investments.

Debt monetisation – printing money – is another strategy. The US Federal Reserve is already the in-house pawnbroker to the US government, purchasing government bonds in return for supplying reserves to the banking system. Expedient in the short term, monetisation risks setting off inflation. The absence of demand in the economy, industrial over-capacity and the unwillingness of banks to lend have meant successive "quantitative easing" has not resulted in higher inflation to date. But the risks remain.

Monetisation is inexorably linked to devaluation of the US dollar. The zero interest rates policy and debt monetisation is designed to weaken the dollar. As John Connally, the US Treasury Secretary under President Richard Nixon, belligerently observed: "Our dollar, but your problem."

Despite bouts of dollar buying on its safe haven status, the US dollar has significantly weakened over the last two years, losing around 20 per cent against major currencies since 2009. As the dollar weakens US foreign investments and overseas income gain in value. But the major benefit is in relation to debt owned by foreigners. As almost all its government debt is denominated in US dollars, devaluation reduces its value.

This forces existing investors to keep rolling over debt to avoid realising losses. It encourages them to increase investment, to "double down" to lower their average cost of US dollars and debt. It also allows the US to enhance its competitive export position.

Major investors in US government bonds now find themselves in the position John Maynard Keynes identified: "Owe your banker £1,000 and you are at his mercy; owe him £1m and the position is reversed."

Valery Giscard d'Estaing, the French finance minister under Charles de Gaulle, famously used the term "exorbitant privilege" to describe the advantages to America of the dollar's role as a reserve currency and its central role in global trade.

That privilege now is not only "exorbitant" but "extortionate". How long the world will let the US exercise it is uncertain.

Satyajit Das is a former banker and author of "Extreme Money" and "Traders, Guns & Money"