How Mukesh Ambani treats poor people

India's rich hardly have a heart for the poor

MUMBAI / BANGALORE. India is home to hundreds of millions of poor - and more and more billionaires. They earn their money with products as diverse as gas, pharmaceutical products, software or media. But almost all of them have one thing in common: they give off very little.

In the heart of Mumbai is India's most expensive house - a 27-story box building that only houses one family: the Ambanis. Mukesh Ambani is the richest man on the subcontinent with an estimated $ 20 billion. In his house Antilia there is space for 168 cars, it has three helicopter landing pads, nine elevators, a cinema and a temple, as reported by Vanity Fair magazine.

Ambani grew rich with refineries, oil and gas. He built up the Reliance company together with his father in the 1980s. India's second richest man, Dilip Shanghvi, is also a self-made billionaire. He managed to amass $ 17 billion with the pharmaceutical company Sun Pharmaceutical Industries. Third on the wealth list, Azim Premji is the head of software company Wipro with $ 16 billion. Forbes magazine recorded more than 100 Indian billionaires in 2014, up from 55 in the previous year.

In terms of philanthropy, however, the 69-year-old Premji left the other super-rich in India far behind. These usually only give back a few per mille or percent to society. On the other hand, Premji donated more than twelve percent of his money to charity last year, reported the Chinese magazine Hurun, which also takes a close look at the rich in India. The Wipro boss gave seven times as much as the second on the list, the metal magnate Anil Agarwal.

Premji is certain that this will change soon. "We will see a lot of large-scale philanthropy in the years to come," he said. In the USA, too, industrialists like Andrew Carnegie and John D. Rockefeller first created wealth with oil and steel before they became pioneers in donations at the end of the 19th and beginning of the 20th centuries. "By comparison, India is still in the early stages of developing a modern economy and building wealth."

In the initiative "The Giving Pledge" founded by US investor legend Warren Buffett and Microsoft founder Bill Gates, Premji is the only Indian member - and has thus committed to surrender at least 50 percent of his assets. His foundation uses most of it for education, especially for state elementary schools. Education is arguably the most important social institution when it comes to improving society, says Premji. "Eradicating poverty must be one of our main goals," added Premji. In fact, 30 percent of Indians still live below the absolute poverty line, that is 363 million people. And the gap continues to widen: According to analyzes by Crédit Suisse, the richest one percent of Indians today own almost half (49 percent) of all private wealth. In 2000, these super-rich only held 37 percent of the wealth.

Some of it flows down. In addition to Premji, other entrepreneurial families participate in education, such as Tata, Wadia and Birla, who founded schools, colleges, universities and scientific institutes. However, not according to the watering can principle. "They pass their money on to people who can influence them. There is still feudal thinking behind it," says Samir Saran, vice president of the independent think tank Observer Research Foundation in New Delhi. This could be your own employees, people from your home village or family members. In fact, many of India's super-rich are in the process of family succession. Premji or steel magnate Lakshmi Mittal are likely to hand over their companies to their sons; IT titan and seventh richest Indian Shiv Nadar has prepared everything for his daughter Roshini. This is easier in India than in the USA, for example, where 40 percent inheritance tax has to be paid. They don't exist in India.

However, the Indian government only introduced a law last year, according to which large Indian companies have to spend two percent of their profits on promoting the disadvantaged. "We need even better instruments for charity funds," demands Saran. But these would surely come soon. "First we have to get used to the idea that we are getting so rich now. That is all a development that only started in the 90s."