Charity doesn't begin at home

America may be going through its worst downturn in recent memory, but it’s bringing out the best in its people. At least, in the richest few when it comes to redistributing wealth and creating broader prosperity. In June, Warren Buffet and Bill Gates started a campaign, The Giving Pledge. Its members have one simple aim — to give back at least half their wealth to the community either during, or after their lifetime. This week, seventeen US billionaires, including the young Facebook co-founders Mark Zuckerberg and Dustin Moskovitz joined, taking the list to fifty seven.

The enthusiasm is worth emulating and wealthy Indians have been mercilessly beaten up for not being more giving. India has few of the current problems America has. Its economy is on a trot, consumption is robust, the savings rate is high and the billionaires are growing. What’s more, wealth is being created in many uncommon quarters. Just don’t ask how.

Here’s one anecdote. This week a thief caught in Delhi with cash of about Rs 50 lakh claimed he had stolen it all from a government employee’s house. When the cops turned up to question the state employee, he admitted he had been robbed, but barely a lakh worth of cash and jewellery had been taken. It’s not hard to fathom why he said so. Whoever lost the money would be reluctant to claim it because it’s uncomfortable to reveal how they came to possess it in the first place.

In today’s India, where corruption and cronyism compete for the top slot with impressive economic growth, it’s safe to assume that irrespective of how fast we grow, we will never create broad prosperity. Here’s why.

Corruption rarely benefits the entire community. At best, it helps the recipient and the donor. Wealth that moves in that circle ends up in dark corners where it can’t be seen. With graft at the heart and centre of getting work done, money that would have ordinarily been made available for charity is often diverted as grease money. Bribe money over-inflates the cost of doing business, introduces variables that are hard to anticipate and mistakes that end up being costly to correct. It builds a mechanism that prevents the right use of money. Individuals and corporations that have to grease their way to wealth, are already giving away too much of their money in the broadest possible terms, for the worst possible cause, leaving them with a faint appetite for charitable causes.

With Indian companies still mostly founder owned, some being first generation, the tendency is to hoard wealth for future generations in the narrow sense of the family, rather than deploy it for the community.

That leaves a whole class of working individuals who generate only modest wealth — with finite means and savings. This category of wealth generators is often loath to give because high inflation will always rob them of their true purchasing power and erode their nest-egg. And what they save will always fall short of what they should, because of the runaway cost of goods and services in a graft-led economy. It’s the invisible unfair tax on top of the taxes they pay.

Many donors argue not all the money reaches the deserving. Most mass charity we see is to religious organisations, often in gratitude, because a feverish prayer has been answered.

So, any feeble attempt to create equitable wealth will have to come mostly from the government. This government probably recognises that, but its own cauldron is so leaky that it’s hard to plug.

For private citizens to act and feel charitable, the state will have to find a way to stop the enormous spillage and restore accountability. Unfortunately, it’s the only power with the ability to bestow. Indians can only hope they won’t ask for more money at the altar to summon up the will.

(Anjana Menon is executive editor, NDTV Profit. Views expressed here are personal)