98 Richest Indians Own Same Wealth as the Bottom 552 Million People: Report
Moneylife Digital Team 17 January 2022
While 84% of households in the country suffered a decline in their income in a year marked by the tremendous loss of life and livelihoods, the number of Indian billionaires grew to 142 from 102, shows the latest briefing ‘Inequality Kills’ by Oxfam India. “More than 4.6 crore Indians meanwhile are estimated to have fallen into extreme poverty in 2020, which is nearly half of the global new poor, according to the United Nations (UN). The stark wealth inequality in India results from an economic system rigged in favour of the super-rich over the poor and marginalised,” the briefing published ahead of the World Economic Forum’s Davos agenda says.
 
The briefing indicates that the collective wealth of India’s 100 wealthiest people hit a record high of Rs57.3 lakh crore or about US$775bn (billion) in 2021. In its briefing, the non-government organisation (NGO) also advocates a 1% surcharge on the wealthiest 10% of the Indian population to fund inequality-combating measures such as higher investments in school education, universal healthcare, and social security benefits like maternity leave, paid leave and pension for all Indians.
 
According to the briefing, in India, during the pandemic from March 2020 to 30 November 2021, the wealth of billionaires increased to Rs53.16 lakh crore or US$719bn from Rs23.14 lakh crore or US$313bn. 
 
In the briefing, the NGO recommended specific steps to recognise inequality is real and agree to measure it, redistribute India’s wealth from the super-rich to generate resources for the majority, generate revenues to invest in the education and health of future generations, enact and enforce statutory social security provisions for workers from the informal sector and to change rules and to shift power in the economy and society.
 
Oxfam India says, “A temporary 1% surcharge on the richest 10% population could help raise an additional Rs8.7 lakh crore, which could be utilised to increase the education and health budget. The primary outcome of the pandemic must be a quality, publicly funded and publicly delivered healthcare system that works for all and not just the rich. A secondary outcome should be an education system which addresses the needs of everyone, not just those privileged to attend elite private schools or have access to digital technology.” 
 
Historically, India has always been dependent more on indirect taxes. In 2000, the percentage of indirect taxation in the total tax revenue was 63.69%. Sadly, Oxfam India says, even during the pandemic, this trend continued as the government revenue remained highly dependent on the indirect taxes—especially the tax levied on the sale and manufacture of goods and services that ordinary Indians depend upon.
 
The Oxfam India briefing shows the trend that indirect tax, as a share of the Union government revenues, has been increasing when there is a decline in the proportion of corporate tax for the same in the past four years. It points out that the additional tax imposed on fuel has risen 33% in the first six months of 2020-21 compared to last year and is 79% more than pre-COVID levels.
 
At the same time, it says, the wealth tax for the super-rich was abolished in 2016. “Corporate taxes were lowered to 22% from 30% to attract investment last year, resulting in a loss of Rs1.5 lakh crore, which has contributed to the increase in India’s fiscal deficit. These trends show that the poor, marginalised and the middle class paid high taxes despite going through the raging pandemic while the rich made more money without paying their fair share,” the briefing says.
 
According to the NGO, privatisation of basic services is detrimental to equality. It says the policy push for privatisation of healthcare and education in India further acts as enablers of inequality in India. 
 
In a 2021 survey by Oxfam India, 52% of the parents who send their children to private schools reported paying hiked fees for the assessment year (AY) 21-22. About 35% of children were prevented from accessing education due to non-payment of fees, while 38% of parents had to pay illegal charges as capitation fees at the time of admission, and 57% of parents had to pay additional charges that were not part of the declared official break-up of fees.
 
Moreover, the survey shows that parents spend a substantial portion of their household income on private school fees, about 15% and above. Oxfam India says that the growing privatisation of school education disproportionately affects the country’s poor and marginalised people, particularly women and girls.
 
“The ‘Inequality Kills’ briefing shows how deeply unequal our economic system is and how it fuels not only inequality but poverty as well,” Amitabh Behar, chief executive officer (CEO) of Oxfam India says, adding, “We urge the government of India to commit to an economic system which creates a more equal and sustainable nation. India can show the world that democratic systems are capable of wealth redistribution and inclusive growth where no one is left behind. India’s fight against inequality and poverty must be supported by the billionaires who made record profits in the country during the pandemic.”
 
Apart from the failure of generating equitable revenue, Oxfam India’s briefing shows the de-prioritisation of education and health in the Union government budget when these two services were needed the most.
 
Allocation towards health in 2021-22 saw a decline of 10% in the Union government’s budget, while the funding towards education in 2021-22 saw an increase of 10% from the previous year. “Health spending as a percentage of gross domestic product (GDP) has remained abysmally low at 1.2% to 1.6% and increased only 0.09% over the last 22 years. Similarly, Education spending as a percentage of GDP has remained low at 3% and increased only 0.07%% over the last 18 years,” the briefing from Oxfam India shows.
 
“There is also an urgent need to improve medical infrastructure by implementing India’s patent rights charter (PRC), standardising diagnostic procedures, building rural clinics, and developing streamlined health information technology (IT) systems in tandem with adopting a family-health approach, making greater investments in healthcare and training and paying frontline healthcare workers adequately,” it added.
 
According to the NGO, India’s expenditure on social security schemes for workers, under the ministry of labour and employment, and the Centrally sponsored scheme of the National Social Assistance Programme, is abysmally low at 0.6% of total expenditure in 2021-22, a decline from 1.5% of the total expenditure from the previous year. 
 
“With 93% of the nation’s workforce comprising of informal employment, there has been little success in bringing them under the ambit of formal employment, which would give them various benefits like paid leaves, health insurance, paid maternity leaves and pension,” it says. 
 
The briefing by Oxfam India also highlights gender parity witnessed during the pandemic. “Oxfam’s global briefing points to the stark reality of inequality contributing to the death of at least 21,000 people each day, or one person every four seconds. The pandemic has set gender parity back from 99 years to now 135 years. Women collectively lost Rs59.11 lakh crore or around $800 billion in earnings in 2020, with 1.3 crore fewer women in work now than in 2019. It has never been so important to start righting the wrongs of this obscene inequality by targeting extreme wealth through taxation and getting that money back into the real economy to save lives,” says Mr Behar from Oxfam India. 
 
Politicians, governments, civil society, academicians, and bureaucrats across the country are repeatedly stressing the need to address high wealth inequality and its ill effects in the past few years. This includes Nobel laureate and economist Abhijit Banerjee, Rashtriya Swayamsevak Sangh’s (RSS) chief Mohan Bhagwat, Kerala’s chief minister (CM) Pinarayi Vijayan and Andhra Pradesh CM YS Jagan Reddy. 
 
“It is clear from the voices across the political spectrum that India needs to address extreme inequality right now. But we need to move from mere words to taking concrete steps to end the cycle of inequality and poverty. And this is possible if the government of India taxes the wealthy, which will generate much-needed resources to fund the recovery from the pandemic,” Mr Behar from Oxfam India says.
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saharaaj
4 months ago
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