Infosys founder Narayana Murthy urges overhaul in archaic rules on donating shares to education institutions

Infosys founder NR Narayana Murthy

Infosys founder NR Narayana Murthy on May 15 called for a revamp of "archaic rules" that hinder the contribution of shares by entrepreneurs to academic institutions. He noted that entrepreneurs possess shares, rather than ample capital, in their startups' early stages.

“We have to change some of the archaic rules. For example, even today, an entrepreneur cannot donate shares,” Murthy said on the sidelines of Infosys Science Foundation’s media briefing.

The comments came in response to a question on whether enough is being done by the alumni and the industry for academic institutions to foster innovation. In the past couple of months, IIT-Chennai and IIT-Bombay have received donations worth crores from the alumni.

“More is needed... Look at the US universities, MIT, Harvard, Stanford, etc. They get endowments in billions of dollars,” said Infosys co-founder Kris Gopalakrishnan. He added that the hope is that the alumni will contribute more. “Today, our institutions primarily depend on government funding, I would like to see equal funding, I want to see more industry participation.”

Reflecting on his wife and Member of Parliament Sudha Murthy’s 1995 attempt to donate Rs 4.5 crore to the Indian Institute of Science, Bengaluru, Murthy said the amount could have been valued at a staggering Rs 3,000 crore as of today had the rules been different.

“Lots of innovations are taking place in the corporate world, they are needed even in academic institutions,” he said. Adding that it is not right to assume that all the donations would not produce the desired results.

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Murthy said he wanted to donate shares to his alma mater IIT Kanpur in the late 1990s but couldn’t do so as the college accepted only cash. “That time none of us had any money, only thing we had was shares. They wanted us to give only money, not shares. If only they had accepted shares, if they had kept it.”

He added that, similarly, today's entrepreneurs would not have much money, but can donate in the form of shares.

Murthy also said dividends earned from such donated shares could support educational institutions. “So, even educational institutions have to look at what will our future be 20 years from now, 50 years from now,” he added.

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In a briefing, the Infosys Science Foundation said it has lowered from 50 to 40 years the upper age limit for the Infosys Prize winners "to reward potential and recognise the promise of future achievement", the not-for-profit trust said on May 15.

This has been done to provide a longer runway for research and also the contribution to be bigger in the world of science. "This change in the direction of the Infosys Prize stems from our vision to create a generation of young academicians who are passionate about pursuing a career in scientific research and provide a longer runway for individuals to develop their work that would have the potential to benefit society at large," Gopalakrishnan said.