High-net-worth families hold key to bridging India’s ₹14-lakh crore social finance gap: Report

India’s high-net-worth (HNW) families are playing a growing role in impact investing; however, their contributions remain fragmented, inconsistent, and insufficient to bridge the country’s widening social finance gap, according to a new report released by Waterfield Advisors and the Impact Investors Council (IIC).

The report, ‘From Legacy to Leverage: India’s Family Wealth and its Role in the Impact Capital Spectrum’, warns that India faces a financing shortfall of nearly ₹14 lakh crore ($170 billion) in meeting its social sector needs—a gap that is expected to widen further. While government funding remains the backbone of social spending, the study argues that wealthy families are uniquely positioned to fill part of this void by blending philanthropy with impact-first and blended finance investments.

Yet, the data paints a sobering picture. Of the 316 HNW families that entered the impact space in 2021, only 64 remained active by 2024. Most of these families preferred early-stage deals, leaving mid- and late-stage enterprises underfunded. Direct participation is also limited, with only 18% of families making direct impact investments. The report adds that blended finance—a tool that combines public, philanthropic, and private capital—is still poorly understood and rarely used.

The report also recommends that wealthy families formalise their impact approaches with clear investment theses and policies and take advantage of platforms like the Social Stock Exchange to deepen their participation. This would help accelerate the country’s $5 trillion growth vision while ensuring that economic gains are inclusive and sustainable.

Soumya Rajan, founder and CEO of Waterfield Advisors, said India’s wealthy families must move from “one-off experiments to conviction-led, sustained strategies” if they are to meaningfully shape the country’s impact landscape. “This is not just about capital, but about a mindset shift where philanthropy and investment converge to solve systemic challenges,” she added.

Girish Aivalli, CEO of the Impact Investors Council, emphasised that family wealth can play a catalytic role in sectors like healthcare, education, agriculture, climate, financial inclusion, and diversity-focussed businesses. “HNW families have the ability to power India’s underserved sectors by supporting high-impact enterprises that drive both social outcomes and economic growth,” he said.