Survival of the Richest: The India Story
The Delhi-based Oxfam India published this India supplement of the Survival of the Richest report on January 15, 2023. It was written by Apoorva Mahendru, Kanishk Gomes, Mayurakshi Dutta, Noopur, and Pravas Ranjan Mishra, researchers working with Oxfam. Quoting the World Inequality Report 2022, this paper states that India’s rising poverty and wealthy elite make it one of the most unequal countries in the world.
The paper states that India has around 228.9 million people living in poverty, making it the country with the largest number of poor people. At the same time, the number of billionaires in the country increased from 102 in 2020 to 166 in 2022. The wealth of the top 10 richest people in India showed a 32.8 per cent rise over 2021 figures. Despite this, the top 10 per cent account for only three to four per cent of the total goods and services tax (GST) collected as compared to the bottom 50 per cent who contribute almost two-thirds (64.3 per cent) of it.
Recommendations of the paper include progressive taxation to reduce the stark income inequality in the country. It also suggests reducing the GST on essentials and instead raising the taxes on luxury articles. Another recommendation outlines increased government spending on the health sector to lower the people’s out-of-pocket expenditure on health needs.The 37-page report contains an executive summary followed by four sections: The case of India (Section 1); Inflation and inequality (Section 2); Why tax the rich? (Section 3); and The way forward (Section 4).
As per the report, as much as 40.6 per cent of India’s total wealth is concentrated in the hands of the richest one per cent of the population. Conversely, the bottom half of the country’s population owns a mere three per cent of its wealth.
The paper cites a Brookings India report that states, based on data from the National Sample Survey Office, that healthcare expenses drive almost seven per cent of the country’s population into poverty annually.
A working paper by the World Bank, published in 2022, reported a higher rate of poverty in rural areas in India (11.6 per cent) in comparison to that in urban areas (6.3 per cent).
The present Oxfam paper cites the 2022 Global Multidimensional Poverty Index to note that India is the only country in South Asia to have considerably greater levels of poverty in female-headed households than in male-headed households.
Citing data from the Reserve Bank of India in an India Today report, the paper states that by the end of June 2022, personal debt levels in the country increased to Rs. 35.2 trillion. Meanwhile, chairman of the Adani group – Gautam Adani – saw his wealth reach around Rs. 10.96 lakh crores by October 2022, making him the richest Indian.
According to a 2018 paper for the World Inequality Lab, the wealth owned by the richest 10 per cent of India’s population grew from 45 per cent of the country’s total wealth in 1981 to 63 per cent in 2012.
The paper cites Credit Suisse data to state that more than 50 per cent of the total wealth of the richest 10 per cent is owned by those in the richest one per cent bracket.
Reducing the stark wealth inequality in the country requires “easing the tax burden on the poor and marginalized”, states the paper. To achieve this, it encourages the government to reduce taxes on basic commodities and hike the ones on luxury products. This is aimed to increase the overall revenue while decreasing the burden on the poor.
The paper also recommends enforcing progressive taxation which can generate enough revenue to fund India’s health and education systems. For example, a tax of just five per cent on the top 10 billionaires of the country can cover tribal healthcare costs for five years.
Focus and Factoids by Naomi Fargose.
Apoorva Mahendru, Kanishk Gomes, Mayurakshi Dutta, Noopur and Pravas Ranjan Mishra
15 Jan, 2023