Buffett should learn our ethos of giving

The following is the report from:  Indian Express / R Vaidyanathan / Wednesday, March 23, 2011.   It makes very pertinent reading, even if a bit rhetorical.

The rootless wonders are agog with ecstasy that Bill Gates and Warren Buffett are visiting India. They will not only explore about investing in India but also urge the Indian business to allocate at least half of their wealth to charity and this year is called year of ‘giving’.

It is important that both of them are educated about our system and ethos of giving which exist from ancient times and do not need lectures through business channels which live and even die for TRPs.

Buffett should know that the greatest hero of all times in India in our puranas is Karna who gave all and his name is interchangeably used for the art of giving in many Indian languages.

Ratan Tata may be shy to point out to Bill Gates that ‘the Tata founders bequeathed most of their individual wealth to many trusts they created for the greater good of India and its people’. So is the case with G D Birla and Jamnalal Bajaj. This may not be trumpeted by Kumara Mangalam Birla and Rahul Bajaj. As a perceptive blogger Sandeep Singh says that as early as 1895 Dayal Singh Majithia bequeathed away three million rupees for noble causes including new ventures by Indians. Actually Majithia was an early ‘venture capitalist’ in India even though not many know about him.

We also find that Swami Vivekananda could not have gone to USA but for local business people funding him and the weightlifters and wrestlers could not have won gold medals at the recent Commonwealth Games but for local traders financing their clubs in remote parts of Orissa and Manipur. Many may not have heard about Ekal Vidyalayas which are one-teacher schools functioning in remote parts of India, particularly in tribal areas. They are in as many as 35,000 villages, educating more than one million children. Take the other example of Satya Sai initiative to bring water to Rayalseema using private donations. The Ninth Plan document of Planning Commission says, “The Sathya Sai Charity has set an unparalleled initiative of implementing on their own without any budgetary support a massive water supply project with an expenditure of `3 billion to benefit 731 villages, etc.”

Later this project was extended to Chennai costing more than `600 crore. Ramakrishna Mission runs around 200 hospitals serving nearly one crore people annually mostly in rural areas. It also runs around 1,200 educational institutions serving more than 3.5 lakh students of which more than 1.25 lakh are in rural areas.

Nadars engaged in business in Tamil Nadu have funded hundreds of educational institutions and hospitals and so the Marwaris/Chettiars/Katchis/Bhoras all over India.

A lot of our education, healthcare, arts, literature and spirituality efforts/ventures have been fully financed by businessmen who are even shy to talk about it. Herein is the secret to the fundamental ethos of giving in India. It is done without advertisements and trumpets. Actually in our tradition the giver is reluctant to talk about it since it embarrasses the receiver. The fact that it could demean the receiver is reason enough for the giver to keep silent. Remember the way Nitish Kumar reacted when the donation from Gujarat for flood relief in Bihar was advertised? Nitish Kumar recalled our tradition of giving without revealing.

It is told in our ancient wisdom that one should give till the hand bleeds and one should not talk about it. The action will speak even centuries later. The upstarts of today write on every tubelight their names before donating it to a temple or call press conferences to declare their ‘intentions’. That is the US culture. Everything from lovemaking to charity should be advertised and shown on prime time television. Then only you prove that the spouses and receivers are happy.

But why this sudden wallowing in self pity and whining about giving? It all started with the Indira Gandhi Prize being given to Bill Gates on July 25, 2009, and wherein the chairman of National Advisory Council Sonia Gandhi read a speech on the need for Indian businessmen to give for charity (like Bill Gates) and it was published in full by Wall Street Journal and a columnist in that paper pontificated the “rich in India to open their wallets”. Leaders and media in India who are clueless about Indian ethos are setting the Gates and Buffett’s to further pontificate to our business people.

It is interesting that Bill Gates who has operations in Cayman islands and Reno of Nevada to minimise or evade taxes to be paid to the United States government is enthusiastic about “Giving by India Inc”. Warren Buffett is planning to give his dollar assets to the Gates foundation which will reduce estate taxes in the future. Interestingly both of them are some of the few US business barons supporting estate taxes. It is not clear who are their dinner guests in India. If it is Forbes billionaires from India we hope Shahid Balwa of the Spectrum fame is not going to be there!

Somebody should also tell Bill Gates and Warren Buffett that India Inc constitutes less than 15 per cent of our GDP and the real growth masters are small partnership and proprietorship firms which are deeply involved in giving. Actually India Inc in our economy is like an item number in a Bollywood movie. Good to talk about on TV but only has the glamour quotient. Also can we suggest to Gates and Buffett to stop investing in firms in tax havens since that sucks away billions of dollars of money from countries like India. If they really want to help India then they should start a campaign to close down all these tax havens rather than having expensive company-paid dinners at five star hotels of our country urging Balwas to give.

(The writer is professor, Indian Institute of Management-Bangalore.

The views are personal)

URL of this Article : http://expressbuzz.com/opinion/op-ed/buffett-should-learn-our-ethos-of-giving/258790.html 

YOU CHOOSE ... WHICH PATH YOU WANT TO FOLLOW

ToI, Mumbai, 01Mar11, page-17

A serious reform opportunity is lost. Taxing life insurance service providers is a 'pass on' and we will have to pay more. Also, why tax AC hospitals when quality health care needs air conditioning? With excise duty on 'branded’ garments, the small town guy who puts his own label to improve his reach will pay more 
PRAFUL VORA | ACTIVIST

FINANCE BILL FY12

The following proposals / allocations will hurt the citizens: 

1.  taxing life insurance service providers.  This is a 'pass on' and our under insured will pay more and more.  

2.  taxing AC hospitals, when quality health care needs air conditioning.  We are still in the mindset that AC is a luxury ... with our dusty and polluted air, AC is a necessity and improves efficiency of service providers and the clients.  Why should health care be taxed in any way? 

3.  excise duty on 'branded garments' ... now the small town guy who puts his own label to improve his reach will pay more.  This is ridiculous. Do we want to improve production or imports?  All China goods carry some brand mark, so will there be special import imposition on all of those?  

4.  token excise duty of 1% on 130 new items ... just to collect statistics, a costly method I will say.  The Govt must use other on line filing methods without creating work for clerks. 

5.  Micro-irrigation equipment has its duty reduced but not brought to full exemption, yet the Govt. talks of spending on agriculture.  Here is a clear case of double speak. 

6.  reduction in duties on downstream crude oil products would have helped control inflation; yet this is not done.  Why heavily tax transport inputs, this adds to cost and not to value.  How can India compete and double its exports in five years?  

7.  if we have difficulty in mining coal, gypsum, etc because of forest lands, adivasi lands and environ. concerns; at least eliminate import duties on same to allow power, cement, infrastructure to get benefit of lower inputs. Why just token reduction?

8.  as usual, focus is on stock market, not long term reforms. So, FII investing in Mutual Funds is a big plus for the market; yet FDI for infrastructure is not clear, FDI in manufacturing is not easy. 

9.  a simple solution of pulling back Rs. 1000 currency notes to control corruption and black money is missed.  USA did it during Nixon's time and the Mafia lost ground.  

These are the errors of commissions and omissions which would otherwise, have made this Finance Bill tolerable. 

The focus of the Finance Bill should be only on irrigation (small local dams and micro-irrigation), low agri-interest rates, cheaper produce storage and transport corridors and coaching for employable skills.  Taxes and Duties on processed foods should be removed, to encourage production and consumption.  Food Security is needless if above are made robust.  

The dangers of an imported Second Green Revolution should be clear in that focus should be on fine tuning existing technology rather than handing over research control to foreign Corporates and sourcing so called better seeds from foreign Corporates.  If the existing skill sets and tools with the farmers are improved there will be no need for Corporates to move in.  The meek surrender of the nations assets and resources to Global Corporates who focus on financial gains by any means must be avoided.  

Next on priority should be meaningful education with emphasis on 'values education', robust health care and continuous electric power.  All other social spending should be reduced to accommodate the above.  NREGA is useless if employable skills and power are not provided, we are perpetuating beggary and needless immigration to urban areas.  

Finally, India needs to review its taxation process entirely.  The ArthaKranti Prathisthan proposes 'bank transaction tax' and currency compression.  We must have public debate and prepare a doctrine.  India has the skill set for this and can lead the world in this sphere.  

All the above taken together will lead to eleven plus economic growth rate with a human face and drastically reduce the current social problems that India and the world face.  Unfortunately, the above are not fully addressed this time.