Why Indian companies donate to universities abroad

There was a small piece of news the other day that one prominent Indian IT Company is donating $35 mn to Carnegie Mellon University. That set me thinking, why do Indian corporates donate to US universities who obviously have more resources, than to Indian universities and institutes? Even if these universities have better infrastructures for doing research, isn’t it more apt for an Indian company to invest in human capital and research in its own country than in foreign lands? The reason however is not hard to find. It is the eternal principle of satisfying one’s master and to give something in order to get some favors. Indian IT industry is already plagued with problems of having to grapple with accusations ranging from sending people unethically on wrong visas to following unfair employment practices and they will have to try all means to satisfy the policy makers in US so that they return the favors. Indian industry is adopting such clandestine measures in order to gain foothold in rich and powerful countries. This trend is set by some of the big industrialists. In 2010 Ratan Tata donated $50 mn to Harvard business school. Anand Mahindra did the same to establish Mahindra HR centre, followed by N.R Narayanamurthy to donate around $5.2 mn, to (you guessed it right) Harvard again. One of the reasons for these largesse could be that all the donors studied in Harvard. However the question still remains as to why Indian universities are not even in consideration for these super rich industrialists when they make most of their money from businesses in India. Is there any other motive? There is likely to be, afterall they are businessmen, and businessmen value business above patriotism. America grew academically in the late nineteenth and early twentieth century as several of its big industrialists were also philanthropists and they donated large amounts of money to different American Universities thus contributing to their growth as world class institutes. That is one reason why eventually Harvard, MIT and other American universities overshadowed the fame of Oxford and Cambridge which had earlier done the same to their German counterparts. They also drew the best of the talents from all over the world and paid them very well on account of sound financials. However Indian businessmen, for whatever reasons, do not want to walk that path. There are very few philanthropists in India. Super riches are not known for donating money except for gaining favors. Big business houses donate to political party funds to influence their decision, but their investment in education and human capital development and development of research infrastructure is negligible.  Of course there are notable exceptions like Azim Hassan Premji of Wipro who established a $2bn fund for education set aside from his personal wealth. Another reason that was put forward by some analysts is that Indian corporate biggies tend to donate more when their children are about to enter colleges and Indian elite has, for obvious reasons, strong preference to send their children to study abroad than do so at home. That holds true even for the so called “middle class cult figures” like NRN.

However to be fair to Indian businessmen, their contributions to universities cannot be very effective till Government and bureaucracy influences on the higher education are curbed. Indian Governments control IITs, IIMs and many other reputed universities. Through UGC they set aside grants to these institutes. In exchange there is bureaucratic interference from appointing vice chancellors, deans, directors and other academic heads to setting up courses and curriculum and defining the political agenda. Such an environment is definitely not conducive to high end research, nor do they promote meritocracy and freedom for creativity and independent thinking. Moreover, some of the academia and intellectuals leading the reputed institutes in India are branded as “very left liberal” and rightly so. They are loathe to take money from corporates for any improvement. They always look upon corporate motives with suspicion and I had personal experiences in one of the best business schools of India in this regard. So all in all probably the ground is not fertile enough to plant seeds and therefore Indian corporates have taken a wise decision of investing where it pays more, rather than being driven by “foolish” patriotic fervors.