Roving Periscope: ‘One percent of Indians own over 40% of the country’s wealth’

Virendra Pandit

New Delhi: The wealthiest one percent of people in India now own more than 40 percent of the country’s total wealth, while the bottom half of the population together share just 3 percent of the wealth, the media reported on Monday.

Releasing the India supplement of its annual inequality report on the first day of the World Economic Forum Annual Meeting at Davos, Switzerland, human rights group Oxfam International said that taxing India’s ten-richest people at 5 percent can fetch entire money to bring children back to school.

Oxfam, or the Oxford Committee for Famine Relief, was founded in Britain in 1942.

The report, titled Survival of the Richest, said if India’s billionaires are taxed once at 2 percent on their entire wealth, it would support the requirement of Rs. 40,423 crores for the nutrition of malnourished in the country for the next three years.

“A one-time tax of 5 percent on the 10 richest billionaires in the country (Rs. 1.37 lakh crore) is more than 1.5 times the funds estimated by the Health and Family Welfare Ministry (Rs. 86,200 crores) and the Ministry of Ayush (Rs. 3,050 crores) for the year 2022-23.”

On gender inequality, the report said that female workers earned only 63 paise for every 1 rupee a male worker earned.

The difference in the case of Scheduled Castes and rural workers is even starker –the former earned 55 percent of what the advantaged social groups earned, and the latter earned only half of the urban earnings between 2018 and 2019.

“Taxing the top 100 Indian billionaires at 2.5 percent, or taxing the top 10 Indian billionaires at 5 percent would nearly cover the entire amount required to bring the children back into school,” it added.

Oxfam said the report is a mix of qualitative and quantitative information to explore the impact of inequality in India.

Secondary sources like Forbes and Credit Suisse have been used to look at the wealth inequality and billionaire wealth in the country, while government sources like NSS, Union budget documents, and parliamentary questions, have been used to corroborate arguments made in the report.

Between the outbreak of the pandemic in January 2020 and November 2022, billionaires in India have seen their wealth surge by 121 percent or Rs. 3,608 crores per day in real terms, Oxfam said.

But approximately 64 percent of the total Rs. 14.83 lakh crore in Goods and Services Tax (GST) came from the bottom 50 percent of the population in 2021-22, with only 3 percent of GST coming from the top 10 percent.

Oxfam said the total number of billionaires in India increased from 102 in 2020 to 166 in 2022.

The combined wealth of India’s 100 richest people has touched Rs. 660 billion    (Rs.54.12 lakh crore), which could fund the entire Union Budget for over 18 months, it added.

Oxfam India CEO Amitabh Behar said, “The country’s marginalized—Dalits, Adivasis, Muslims, women, and informal sector workers—continue to suffer in a system which ensures the survival of the richest.

“The poor are paying disproportionately higher taxes, spending more on essential items and services when compared to the rich. The time has come to tax the rich and ensure they pay their fair share.”

Behar urged the Union Finance Minister to implement progressive tax measures such as wealth tax and inheritance tax, which, he said, have historically been proven effective in tackling inequality.

Citing a nationwide survey by Fight Inequality Alliance India (FIA India) in 2021, Oxfam said it found that over 80 percent of people in India support a tax on the rich and corporations who earned record profits during the Covid-19 pandemic.

“More than 90 percent of participants demanded budget measures to combat inequality such as universal social security, right to health and expansion of budget to prevent gender-based violence,” it added.

“It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy.

“We need to do this for innovation. For stronger public services and for happier and healthier societies,” said Gabriela Bucher, Executive Director of Oxfam International.

Oxfam India urged the Union Finance Minister to introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering. It also demanded a permanent increase in taxes on the richest 1 percent and especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.

Oxfam also called for inheritance, property, land, and net wealth taxes while enhancing the budgetary allocation of the health sector to 2.5 percent of GDP by 2025, as envisaged in the National Health Policy. It also favored public health systems to be strengthened and budgetary allocation for education to be enhanced to the global benchmark of 6 percent of GDP.

“Ensure workers in the formal and informal sectors are paid basic minimum wages. The minimum wages should be at par with living wages which is essential for living a life with dignity,” it added.