07 Jun 2022  |   06:30am IST

When does it make sense to be a billionaire?

Eugenio Viassa Monteiro

After India’s independence, the Soviet-style economic model, adopted to solve the pressing problems of poverty, hunger and underdevelopment, was probably the main cause of economic stagnation. Of course, the lack of preparation of the heads of the institutions of “production”, whether cooperatives or industrial companies, owned by the State, caused the waste of resources, with little knowledge of the business, accumulating losses, in a country already left poor by the colonisers.

Because of the inability of the Government to solve all the problems detected throughout the post-independence period, notable personal or cooperative initiatives emerged with vigour to help poor strata of the society, among others:

- the Federation of Milk Cooperatives was born in Anand, owning the brand AMUL, which was replicated many times all over India. It was the starting point for making India the number one milk producer from 1997 on.

- the Aravind Eye Care System, grew from a very small 11 beds eye clinic to the point where it has now 14 hospitals. There only 40% pay their bill, while the others are treated free of charge or with high discounts; 

- the Barefoot College emerged in Tilonia, Rajasthan, among the poorest populations that are rapidly evolving, learning to install and maintain solar panels for power production, install and maintain pumps for water irrigation, learning water harvesting, etc.; 

- the Jaipur foot makes and fits prosthetic feet, for a paltry amount, allowing them to live an almost normal life; 

- many Microcredit initiatives;  

- a variety of Self-help groups; 

- and a myriad of other social initiatives.

In due course and a new revival of economic activity took off in India, starting in 1991, with the change from the economic model (of Soviet type) to that of free initiative; many entrepreneurs launched very profitable projects in the fields of Information Technologies, Telecommunications, Pharmaceutical products, Food industries, Consumption goods, Automobiles, Tourist enterprises, etc, all those with an enormous valuation of the capital invested and huge growth.

Indian billionaires

By chance, I had the opportunity to read parts of a report where it came as no surprise that India has the third-largest number of “billionaires”, after the US and China (Cfr. Knight Frank’s 2022 Wealth Report). India had 145 billionaires in 2021.

They came from the intense entrepreneurial activity after 1991 in all the sectors where India was lagging, but at the same time with strong capabilities to make quick progress.

Billionaires have the potential of doing a lot of good. And they are worth to the extent that their assets are applied with a clear sense of purpose, for the improvement of educational and health infrastructures, or to ensure minimum living conditions for everyone. 

It is natural that the 145 billionaires while amassing their vast fortunes, have taken many philanthropic initiatives. And if they did not do so, they can do it now, as many poor people are still waiting. They will have also developed many business companies in the country, creating many jobs along the way, too. 

Also according to the Wealth Report 2022, the number of Indian households with assets worth over $30 million has increased by 11% in the last year. The great asymmetries that persist in the country, with an abundance of poor and needy, will certainly be the target of immediate attention of those with assets and the desire to help raise the level of well-being of all. Among them is a high percentage of undernourished children, and it is very important not to let them suffer the consequences of insufficient nutrition, their whole life, in their physical and intellectual development.

Along with the billionaires, many Foundations appeared with social purposes, such as the ones of Shiv Nadar (Founder of HCL-Hindustan Computers Limited), Azim Premji (Founder of WIPRO), and the founding members of Infosys, each one with his Foundation. And Tata Sons, owned by philanthropic trusts, continued its humanitarian objectives. 

All the Foundations have activities in line with their objectives: some to respond to health issues; others for the basic, secondary or advanced education; and others for the improvement of the educational system; for the betterment of the training of Teachers; and for carrying out R&D in the field of education, etc.

Jamsetji Nusservati Tata

I read with pleasure parts of the HURUM Report referring to the greatest philanthropist, Jamsetji Nusservati Tata, the founder of the Tata Group, who would have donated $102,500 million, and inspired the creation of philanthropic trusts that hold 66% of the Tata Sons, to continue actively contributing to the society.

 “Jamsetji N. Tata, who founded the Tata Group in 1868, was a man of exceptional energy (…). He had grown a very successful textile business, starting with Empress Mills at Nagpur. He had put in place the blueprint for a world-class integrated steel plant at Jamshedpur. He had planned clean electric energy for his city of Mumbai through an ambitious hydroelectric project. In 1892, he had founded an endowment for the education abroad of promising Indian students, the first of its kind. Thereafter, he had invested significant effort in evangelising the country’s need for a university of higher education and research in science. 

Jamsetji will certainly receive deep thanks from the many millions who were touched by his acts of generosity. 

{The Author is Professor at AESE-Business School (Lisbon), Author of The Rise of India.}


Idhar Udhar