India's wealthy are finally letting go of an old subsidy

Oil and gas magnate Mukesh Ambani is India's richest man, with an estimated net worth of $22 billion and a 27-story home in Mumbai that has a ballroom, a movie theater and six parking levels.

But it was not until a few years ago that he gave up the cooking-gas subsidy that the government makes available to every Indian household. In April, Ambani sent a note to his employees urging them to do the same and contribute to the nation's economy.

Ambani's appeal was in response to an unusual call by Prime Minister Narendra Modi, who has asked affluent Indians to give up the subsidy so that the money can be used to help the country's poor, many of whom still cook over stoves fired by wood or cow dung.

Other top businessmen, Bollywood stars and high-ranking politicians also have taken the "Give It Up" pledge, including Ambani's brother, Anil (worth $4 billion); automaker Anand Mahindra ($1.3 billion); and steel titan Naveen Jindal (family worth $6.4 billion).

The value of the subsidy? The equivalent of about $3.30 a month, or $40 a year.

India's 64-year-old prime minister is a man from modest beginnings who made his career in politics as a worker for the Rashtriya Swayamsevak Sangh, a nationalist movement whose stated mission is to work for the betterment of the country. In his first year in office, Modi has launched a drive to clean up India and a movement to end female foeticide.

But it is still unusual for a politician to make such a public call for sacrifice, experts say, even a modest one.

"What this guy is doing is consensus-building in his own way," said Sandeep Aggarwal, the chief executive of GiveIndia, a charity Web portal. "He's saying, 'Listen, I'm giving you the option of giving up and I'm urging you to give it up, but I'm not forcing you.' He's trying to inspire people to do the right thing. In all my years in this country, I've never seen any politician do this."

Giving and philanthropy have changed dramatically in India in recent years, as incomes rise and affluent donors have begun to look beyond the traditional pathways of religious institutions and family inheritance.

Yet its super-wealthy have often been accused of not doing enough, with the exception of Azim Premji, the billionaire founder of software exporter Wipro, who has pledged 39 percent of his shares in his company to charity. (A headline on an opinion piece in the Times of India this week read: "Azim Premji shows the way to India's Scrooges.")

Notwithstanding the apparent willingness of the affluent to join Modi's Give It Up campaign, getting middle-class Indians to voluntarily forgo the cooking gas subsidy may be a tougher sell, expert say, because they see the perk as one of the few things the government does for them. They now buy their cooking gas cylinders at market rate — about $9.80 — and get the $3.30 subsidy refunded to their bank accounts each month.

The program benefits about 150 million largely urban middle- and upper-middle-class Indians but not the rural poor, because the poor cannot afford gas stoves or live in areas far from distribution networks. According to the government, the poorest households consume only 25 percent of the cooking gas — known as LPG, for liquefied petroleum gas.

"It's basically relying on people's altruism to reduce subsidy expenditure," said Kieran Clarke, a researcher for the International Institute for Sustainable Development in Geneva. "It's noble but not very effective."

India has long subsidized a variety of goods for its citizens, including grains and kerosene. Despite some much-needed changes, these programs took a $37 billion bite out of the budget this fiscal year.

The government made some strides in reducing the LPG subsidy expenditure when it began electronically linking the subsidy to bank accounts in October, helping to thwart unauthorized use. The government has said that it expects to save $1 billion this year because of this new means of disbursement, after saving $2 billion last year. The Give It Up program is likely to save only a fraction of that, Clarke said. The government hopes to reach 10 million people; more than 1 million have signed on so far.

Some middle-class Indians said they are unwilling to give up the subsidy in light of the government's own excesses.

Amit Tripathi, 37, a shopkeeper in the Delhi suburbs, said he would willingly forgo the subsidy as long as members of Parliament gave up their many perks, such as free housing and train and airline tickets.

Meanwhile, a counter campaign on social media is demanding that members of Parliament stop eating in their official canteen. There, politicians — including millionaires and descendants of royals — nosh on chicken masala and fish curry for pennies. Modi ate a 50-cent vegetarian meal there earlier this year.

Another suggested that the prime minister, who has become known for his globe-trotting, should keep his hands off their cooking gas.

"Ask the prime minister why he is after our LPG gas subsidy. Ask him to limit his foreign travels," said Rinku Sharma, 29, a worker at a South Delhi computer hardware store. "The government will save a lot of money."