India’s super rich should help fund fight against COVID-19 pandemic – Financial experts

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India’s billionaires have come under criticism for not responding adequately to the pandemic at a time when their global counterparts such as Bill Gates, Jack Ma and Ken Griffin have donated millions of dollars to the fight against COVID-19.

The Indian government announced a US$32.49 billion financial package on March 26, comprising direct cash transfers and free food, to help cushion the impact of the coronavirus-related downturn for the country’s poor. But the package, which works out to around 1% of the country’s gross domestic product, has been described by many as insufficient.

Criticism peaked when India’s elite rich responded fervently to Prime Minister Narendra Modi’s appeal for a coordinated clapping-cum-clanging display of support for frontline workers against the pandemic on March 22, but failed to match their enthusiasm in monetary terms.

In 2019, India added 33 US dollar billionaires, taking the country’s tally to 137 – the third highest in the world, according to the Hurun Global Rich List 2020. China and the United States occupied the first and second spot with 799 and 626 billionaires respectively.

But while many of India’s super rich have not lived up to their financial clout, some have indeed pitched in with the pandemic taking a serious turn in India – the number of COVID-19 cases jumped from just 110 on March 15 to 1,637 on April 01.

Mr. Vijay Shekhar Sharma, founder of digital payments platform Paytm, was an early mover, donating his two months’ salary for the needy among his office staff on March 20.

The firm has also pledged 50 million rupees for any medical innovation that may help fight COVID-19. Paytm has also stated it aims to further contribute five billion rupees to the PM CARES fund that has been set up by the government to assist the campaign against the pandemic in India.

Mr. Anand Mahindra, the chairman of the Mahindra Group, which has interests ranging from software to vehicles, also announced a range of initiatives on March 22, including creating a fund to assist those hit hardest in the group’s value chain and donating “100% of his salary” to it. He also offered the group’s popular holiday resorts to the government as temporary care facilities.

Since then, others have pitched in, most notably Mr. Anil Agarwal, the executive chairman of Vedanta Resources Limited, a metals and mining firm, who has pledged one billion rupees. Reliance Industries Limited has donated 5.1 billion rupees and even set up a dedicated COVID-19 hospital. The firm is chaired and operated by Mr. Mukesh Ambani, who until recently was Asia’s richest man. The Tata Group has also committed 15 billion rupees so far.

On Wednesday, the Azim Premji Foundation, together with two firms from the Wipro group that Mr. Premji leads, also announced a donation of 11.25 billion rupees.

But help groups say they could do more.

“Several of India’s super rich have made some contribution, but it appears rather inadequate looking at the enormity of the challenge,” Mr. Amitabh Behar, the CEO of Oxfam India, told The Straits Times.

“I really hope they do respond to the unprecedented health and economic crisis that has our poor and informal workers looking at a future of hunger, unemployment and deep distress.”

The Edel Give Hurun India Philanthropy List 2019, which ranked donations of India’s 100 most generous individuals, found that just the top 10 of them accounted for 61% of the donations, highlighting untapped potential among the remaining 90.

In a bid to raise more funds, the government on March 23 tweaked norms to allow firms to allocate their mandatory corporate social responsibility (CSR) funding to fighting COVID-19.

India had in 2013 put in place legislation that mandates companies beyond a specified financial threshold to spend 2% of their average net profits made during the three preceding years on CSR activities.

But Professor Kavil Ramachandran, executive director of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business in Hyderabad, told The Straits Times that many firms sit on their CSR budgets because of poor ability to use this money.

“This crisis is an opportunity that such firms should exploit to spend their CSR funds,” he told The Straits Times.

Companies, the professor added, must also respond to the crisis by pitching in at the regional level to boost the campaign against COVID-19, especially by supporting the poor and daily wage workers who have been hit hardest by India’s 21-day lockdown as well the economic downturn.

“This is a fight that cannot be fought alone by the government, and the business people should step in,” he added. (Source: The Straits Times)

 

 

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