A recent Oxfam India study has revealed that the top one per cent of India’s population own 73 per cent of the wealth generated in the country last year. During the past 12 months, the “wealth of this elite group increased by Rs 20.91 lakh crore. This amount is equivalent to the total budget of the Central government in 2017-18.” Oxfam India is reported to have collected data from a report titled “Reward Work, Not Wealth” that was released ahead of the World Economic Forum meeting in Davos where Prime Minister rendra Modi was a keynote speaker at Tuesday’s plery session. India is reported to have added 17 new billioires last year, raising their number to 101. According to the report, the wealth of Indian billioires increased by Rs 4.89 lakh crore—from Rs 15.78 lakh crore to over Rs 20.67 lakh crore. However, what constitutes a distressing scerio is the report’s contention that 67 crore Indians—the poorest half of the population—had to be content with just one per cent increase in their wealth.
What is perhaps even more distressing is that a section of Indian economists should have expressed doubts about the quality of the data used in arriving at these alarming conclusions, since these would imply that inequality has risen drastically in just three years. They have even gone to the extent of cautioning against using such data for policy making. M. Govinda Rao, a former member of the Prime Minister’s Economic Advisory Council said, “There is little hard data to go by in estimating income inequality.” In a sense, this is typical of the remarks people get to hear from our economists whenever any organization publishes data that reflect poorly on the glaring inequality between the rich and the poor in our country and thereby also provide an indirect commentary on the role of Indian economists who have done precious little to recommend steps needed to resolve this scandalous level of economic disparity. It is high time our economists took the responsibility of providing the kind of data about income disparities in the country that are completely reliable instead of questioning the quality of data provided by organizations that have at least attempted to provide important data on the state of our economy that ought to make everyone sit up and take notice.
What the Oxfam India report does is to reveal the kind of economic reality in respect of disparities in incomes that one cannot find anywhere else in the world. This is something that ought to put us to shame, but that is hardly enough. We need urgent steps to set things right. According to the report, 37 per cent of the 101 billioires of India indicated their wealth was inherited from their families. “If we assume that in the next 20 years, at least Rs 10,544 billion will be passed on to the inheritors and on that if 30 per cent inheritance tax is imposed, the government can earn at least Rs 3,176 billion,” says the report. This is an amount that would be sufficient to fince six crucial services: medical and public health, family welfare, water and sanitation, housing, urban development and labour, and labour welfare in the country. The report also said that at least one in every two workers in the garment sector in India was paid below of the minimum wage. According to the report, by these standards, “it will take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment firm earns in a year”. The Oxfam report also says that the government could promote “inclusive growth by ensuring that the income of the bottom 40 per cent of the population grows faster than that of the top 10 per cent” in order to close the income gap. It is suggested that this can be achieved by encouraging labour-intensive sectors that will create more jobs, investment in agriculture and effective implementation of the social protection schemes that exist. Another recommendation is that the government must seal the leaking wealth bucket by taking stringent measures against tax evasion and avoidance. The income gap can also be reduced by taxing the super-rich by reintroducing inheritance tax, increasing wealth tax, reducing and eventually doing away with corporate tax breaks and creating a more equal opportunity country by increasing public expenditure on health and education. What needs to be constantly borne in mind is that the present level of disparity in incomes cannot be permitted to continue if we are serious about forging an egalitarian democratic republic.