One of India's richest men has given £1.27bn to a charity providing education for underprivileged children in rural areas.

Azim Premji, the chairman of India's third-largest software services exporter, Wipro, said he would transfer shares worth 88.46bn rupees to the Azim Premji Foundation, which he founded in 2001.

The Indian finance minister, Pranab Mukherjee, said the pledge would send out a positive signal. "I welcome it. It's a very good decision. I congratulate [him]."

Premji, 65, is India's third richest man, and the world's 28th richest, with a net personal worth of £12.6bn, according to estimates by Forbes magazine.

The donation is one of several recent high profile gifts to charities or educational institutions, many by successful entrepreneurs from India's booming information technology sector.

Bill Gates, the world's richest man, and Warren Buffett, the stocks and shares multibillionaire, recently urged the Asian ultra-wealthy to give more and said they would hold a philanthropy drive in India, similar to a recent exercise in China.

Ramachandra Guha, a respected Indian historian, said this was the third big wave of public philanthropy in recent Indian history. "In the late 19th century, then again in the 1940s and 1950s there were a few exemplary figures who stood apart from the self-absorption, selfishness and vulgarity of the Indian rich," he said.

According to a report by the global consulting firm Bain, around £5bn was given in India in 2009, 0.6% of India's GDP.

Though this compares favourably with Brazil and China, rates in the developed world are up to 10 times greater.

According to Bain, there are more than 115,000 high net-worth individuals in India and the number of billionaires has almost doubled in the 18 months.

However, the wealthiest in India have the lowest level of giving – 1.6% of household income – the study found.

Recent major donors include Nandan Nilekani, co-founder of the hugely successful software company Infosys, who gave £3.6m to the Yale University India initiative and Narayana Murthy who recently gave £3.25m to Harvard University and its publishing arm for a series on Indian literary heritage.

India's Tata Group gave £33m to Harvard Business School, the largest single donation ever received by the institution from overseas, and businessman Anand Mahindra donated £6.6m to the Humanities Centre at Harvard.

"Historically in India philanthropy has been the exception. Interestingly, all the IT sector donors come from outside the classic Indian business caste," said Guha.

"Good education is crucial to building a just, equitable, humane and sustainable society ... All our efforts, including the university that we are setting up, are focused on the underprivileged and disadvantaged sections of our society," said Premji, a Shia Muslim born in Pakistan.