Latest News | Social Sector Spending by Ultra Rich Drops Despite Increase in Wealth in FY22: Report

Mumbai, Mar 2 (PTI) The ultra high networth individuals' (UHNIs) social sector spending declined by 5 per cent in FY22, despite a 9.2 per cent increase in their wealth and the persisting inequities in India, a report said on Thursday.

Giving by the UHNI segment declined to Rs 4,230 crore in FY22, if one were to exclude the contributions of Wipro's Azim Premji, the report said.

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Amid the clampdown on foreign funding of non-profits, the report by consulting firm BCG and Dasra said international funding also declined in FY22.

Private foreign giving dipped by about 3 per cent to Rs 15,000 crore in FY22 as compared to the contributions in the year-ago period, the report said, adding that their contribution to overall giving reduced further to 14 per cent as compared to 15 per cent in FY21 and 21 per cent in FY17.

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Overall, the private giving remained flat in FY22 at Rs 1.05 lakh crore compared to FY21, the report said, adding that the corporate social responsibility spends grew during the fiscal year on the back of the government mandate for top countries to donate towards social causes.

Going forward, the private philanthropic giving in India is estimated to grow at 11 per cent per annum and reach 1.86 lakh crore in FY27, the report said.

In the last five years, total social sector expenditure in India has seen an annual growth of 15 per cent per annum from USD 135 billion (Rs 11.1 lakh crore) in FY17 to USD 276 billion (Rs 22.6 lakh crore) in FY22, the report said.

It attributed this handsome growth to spending by the government, pointing out that the state's share in the overall social spends has inched up to 95.4 per cent now as against 93.5 per cent five years ago.

Despite the growth, India is still significantly short of NITI Aayog's estimation of the total annual funds needed at about 13 per cent of the GDP as against 9.6 per cent in FY22 to achieve UN SDG (sustainable development goals) commitments by 2030, it said.

"With an expanding budget deficit, higher debt burden because of the pandemic, and increased crude oil prices, government finances are likely to be restricted," it said, adding that private philanthropy will have to play a greater role to help the needy.

Going ahead, it said, CSR spends situation is "promising", but there is a need for companies to adopt a "need-based spending".

"As India emerges from the Covid-19 pandemic, ecosystem stakeholders must come together to strengthen community resilience," it said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)