India’s social spending is growing faster than GDP. It’s still not enough
A massive funding gap persists that only a radical surge in private philanthropy can bridge, argues new study
Last Updated: Feb 26, 2026, 11:33 IST4 min
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India is spending more than ever on its social sector. And it’s still staring at a huge gap.
While the government is pumping money into health care and education at a rate that outpaces the nation’s economic growth, the “giving culture” among India’s elite needs a radical structural overhaul to keep pace.
A new report by Bain & Company and Dasra reveals India’s social sector funding expanded at a 13 percent CAGR between FY20 and FY25, reaching roughly Rs27 lakh crore ($310 billion). This growth is driven almost entirely by the public sector, which accounts for 95 percent of all funding, according to the India Philanthropy Report 2026. Total funding is projected to reach Rs50 lakh crore ($570 billion) by FY30.
However, demand is rising faster than supply. According to Niti Aayog, India is still staring at a funding gap of Rs16 lakh crore ($180 billion). By 2030, this deficit could widen to Rs18 lakh crore unless private giving steps up.
“Private sector giving would need to grow at 25 percent plus CAGR versus the forecasted 9 to 11 percent rate to prevent the funding deficit from widening further (assuming public spending remains unchanged),” according to the report. Sustained investment in philanthropic infrastructure could unlock Rs1,25,000-1,35,000 crore ($14-15 billion) of philanthropic capital by FY30, and advance India’s Viksit Bharat initiative.
Families at the centre
Family philanthropy contributes roughly 42 percent of total private giving, combining personal contributions from ultra-high-net-worth individuals (UHNIs), HNIs and CSR spending from family-run businesses. Giving by UHNIs is growing at 23 to 25 percent, fuelled by wealth creation and episodic mega donations.
More tellingly, philanthropy is democratising. The number of donors giving more than Rs50 crore has nearly doubled over five years, according to the report’s findings. Women now lead philanthropic efforts in over 60 percent of families and nearly half of family philanthropies rely on inter-generational leadership to anchor decisions.
The old narrative of Indian giving was dominated by a few legendary family houses like the Tatas. That is changing. “We are witnessing a democratisation of philanthropy with younger organisations entering the fray. And that’s good news because you don’t want the same families to continue to give more and more. That will never be enough,” says Bhavini Malhotra, partner in Bain & Company.
Three Engines of Growth
To bridge the multi-billion dollar gap, three forces must align—family offices, diaspora and regulation, says Ami Misra, associate director at Dasra, a strategic philanthropic organisation.
With 34 million people abroad, the Indian diaspora is no longer just sending money home for family, they are becoming strategic partners. Diaspora giving to India-focussed non-profits has surged—India Giving Day alone raised $9 million in 2025, a 60 percent increase from the previous year.
“The diaspora is actually more diverse in its giving. Almost 50 percent donate to pan-Indian causes,” says Malhotra of Bain. “We thought there would be a high association to their own cities and states. But that’s not true. And this set of donors is more passionate about ecosystem building relative to the family donors in India.”
Domestic wealth is also becoming institutionalised. The number of family offices has exploded sevenfold, from 45 in 2018 to over 300 in 2024. These offices are now treating philanthropy as a core part of wealth stewardship rather than an afterthought.
The right regulatory environment is another important aspect, feels Misra.
India is a global outlier with its mandatory CSR policy, which has institutionalised corporate giving. Adherence is rising, with 62 percent of firms meeting or exceeding their 2 percent CSR mandate in FY24 compared to just 34 percent in FY20.
Regional hubs in Asia are also emerging as critical enablers of philanthropy, according to the report. As global aid declines, Asia is gaining prominence as a centre for philanthropic action. Philanthropic hubs such as Singapore, Hong Kong, and the UAE demonstrate how concentrated wealth, institutional readiness and ecosystem coordination can catalyse impact.
India’s metropolitan cities have already demonstrated credibility, capacity and capability in philanthropy. Now, the imperative is translating India’s strong foundation into durable philanthropic institutions that extend beyond the metros. “The right talent and support for philanthropy-first organisations are the other two important factors that will help bridge the funding gap,” says Misra.
A ‘Mutual Fund Sahi Hai’ Moment for Giving
If the nation can build the same “infrastructure” for giving that it has for wealth management, the developed India goal will be accelerated, says Misra.
A significant amount of Indian charity remains unorganised—often small, informal or purely religious donations. To achieve the 25 percent growth needed, India needs a "Mutual Fund Sahi Hai" style campaign for philanthropy. Just as that campaign demystified equity markets for the middle class, a national movement is needed to build trust in NGOs and simplify the "giving vehicles", say the authors of the report.
The goal is to move unorganised community giving—which is still a massive part of the retail cohort—into professionalised, evidence-based systems.
“A big takeaway from the report was that the sentiment in India has fundamentally shifted. Giving is no longer about compliance, it is about legacy,” says Misra.
First Published: Feb 26, 2026, 11:39
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