Editorial: Rise of billionaires
Increasing wealth inequality raises questions about govt’s much-touted slogan ‘Sabka Saath, Sabka Vikas’
Despite the talk of India being one of the world’s fastest growing economies, there is an increasing level of wealth inequality and shrinking opportunities for the youth. The wealth share of the top 1% of the country’s population was as high as 40% in 2022-23, according to a paper by the World Inequality Lab, a Paris-based global research centre. The income and wealth inequality in India now is worse than what it was during British colonial rule. Titled “Income and Wealth Inequality in India, 1922-2023”, the research paper has found that the wealth share of India’s top 1% is among the highest in the world, higher than even South Africa, Brazil and the United States. While there is no doubt that economic growth has lifted more than 250 million Indians out of poverty in a relatively short time, paradoxically, the socio-economic disparities have increased. Though progress has been made in various indicators — from improved labour participation, health infrastructure and enrolment ratio of students to child mortality — wealth concentration has worsened. Changes in tax policies, including the imposition of additional tax on the super-rich, will ensure better redistribution. Interestingly, the study has revealed that the ‘top-end inequality’ has been particularly pronounced between 2014-15 and 2022-23 in terms of wealth concentration. In other words, India’s rich are getting richer, and that too at an increasingly fast rate, and the poor are getting poorer. If left unattended, this could lead to India sliding into plutocracy. The widening gulf also raises questions about the government’s much-touted slogan “Sabka Saath, Sabka Vikas.”
The relationship between economic growth, poverty and inequality is complex, and the forces that influence it in richer countries may not be at play in India. The report pointed out that a ‘super tax’ of 2% on the net wealth of the 167 wealthiest families in India in 2022-23 would yield 0.5% of national income in revenues and create valuable fiscal space to facilitate investments in the much-needed sectors. Apart from restructuring the tax system, increased public investments in health, education and nutrition are needed to enable the average Indian to meaningfully benefit from globalisation. More importantly, the creation of adequate remunerative jobs holds the key to reducing poverty and inequality. India needs to grow at 8% on a sustained basis in order to achieve this. The country’s economy grew by a better-than-expected 8.4% in the October-December quarter of 2023 — the fastest pace in a year-and-a-half. Though the NITI Aayog has claimed that over 25 crore people were lifted out of multidimensional poverty in the nine-year period from 2013-14 to 2022-23, a lot more needs to be done to make India a less unequal country. Several sections in India, including women, informal workers and inter-State migrants, are vulnerable to economic fluctuations. Appropriate policy interventions are needed to meet the aspirations of these sections.
