India has the third largest number of billionaires worldwide _ 69 of them according to the most recent Forbes survey _ who are collectively worth US$280 billion. Still, 45% of children below five years of age in India lack elementary health-care and suffer from malnutrition.
So when US-based Warren Buffett and Bill Gates visited several cities earlier this year to request Indian billionaires to give away a large part of their wealth in their lifetime as they have done, it triggered a debate.
Increasing numbers of industry leaders now say that society should not look at high achievers with hatred and envy, and accept that an open capitalist society is essential for economic growth and societal well-being.
The debate has oddly turned cynical as there are 800 million poor people in India _ based on the World Bank's poverty line definition of two dollars a day _ despite the $1.3-trillion economy propelling ahead at a 9% GDP growth rate.
And the federal government is working on a new law which proposes that companies should earmark two percent of their average profit for the past three years for corporate social responsibility (CSR) activities and inform shareholders about the policies they have adopted in the process.
Praful Patel, the federal minister for heavy industries and public enterprises, says community development cannot be seen in isolation and it is no longer a task confined to the government alone.
The industry, however, believes it should be allowed to monitor implementation of CSR activities itself without government intervention.
Says R.P.N. Singh, the minister of state for corporate affairs: "The government and industry must alter mindsets and arrive at a consensus to bring inclusive growth by participation of corporate sector. We would like to work with companies and arrive at a consensus rather than put a gun to their heads."
Charity donations in India totalled about 330 billion rupees (223 billion baht) in 2009, according to a study by the consulting firm Bain & Co, which was less than one percent of the country's GDP. Only 10% of India's charity funds come from individuals and companies. The government accounts for 65% and overseas aid agencies the rest.
But things may be changing. Last year, Wipro chairman Azim Premji transferred 213 million shares worth 88.46 billion rupees to a foundation that is little-known despite its contribution in improving the education system in various states of the country. His act of philanthropy was the biggest in India so far.
GMR Group chairman G.M. Rao has pledged 15.4 billion rupees to the GMR Varalakshmi Foundation to serve the needs of the underserved sections of society. Anand Mahindra of Mahindra group, Narayana Murthy of Infosys and Ratan Tata of the Tata group found it safer to donate $10 million, $5 million and $50 million respectively to Harvard University for the projects.
Reliance Industries chairman Mukesh Ambani's wife Nita is actively involved in philanthropic activities in the fields of education, human resources and disaster relief.
"The purpose of any business cannot be only profit," says Mr Ambani. "Profit for the shareholders is important. But unless entrepreneurs have a larger purpose and businesses that change lives of millions of people, a sustainable business cannot be created."
Preeti Malhotra, the chairwoman of the national council on corporate affairs at Assocham, says India Inc is increasingly looking at community development not merely as a charity or CSR work but as a strategic social investment that will finally lead to improvements in competitiveness, image building and enhancement of shareholder value.
It will develop employees' morale and loyalty, and finally expansion of market base with brand equity, she said. "The growth and performance of an industry heavily depends on community resources. Investing in community development means building and adding to the competitiveness of industry itself."
But the move toward a knowledge-based economy at the national and global levels threatens to widen the existing income disparity between those with access to information technology and those without. To bridge the digital divide, well-coordinated public-private partnerships that are flexible to local conditions are crucial if the internet is not to further marginalise some groups in the society.
According to a McKinsey global survey, environmental, social and governance programmes create shareholder value. But neither chief financial officers nor professional investors include them while evaluating business projects or companies.
However, the trend is clear _ smart partnering is emerging as one way to create value for innovative companies and society simultaneously by developing creative solutions that draw on complementary capabilities of both to address the challenges that affect each.
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