Editorial: Survival of the richest
The richest 1% in the country own more than 40% of total wealth, while the bottom half of the populace shares only 3%
The dividing line between two Indias — the haves and have nots — has become too sharp and stark to ignore. The coronavirus pandemic has further widened the gulf between the rich and the poor in ways that the country never experienced in the past. The latest report by Oxfam International has brought to the fore the disturbing realities of the wealth distribution in India. The richest 1% in the country now own more than 40% of its total wealth, while the bottom half of the populace shares only 3%. The rich have become richer and the poor poorer during the pandemic. From the outbreak of the pandemic to November 2022, billionaires in India have seen their moolah go up 121%. While the country suffers from multiple crises like hunger, unemployment, inflation and health calamities, the billionaires are doing extremely well for themselves. The poor, meanwhile, are unable to afford even basic necessities to survive. At the global level, the world’s richest 1% have grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020. This is almost twice the money earned by the rest of the global population. The Oxfam report, which comes a fortnight before the presentation of the union Budget for the 2023-24 financial year, has sought a systemic and wide-ranging increase in taxation of the super-rich to ‘claw back crisis gains driven by public money and profiteering’. Oxfam has also urged the Finance Minister to introduce one-off solidarity wealth taxes and windfall taxes.
In the 2022-23 Budget, the FM had announced pruning of the surcharge on corporate tax from 12% to 7% , besides extending the concessional corporate tax rate of 15% for another year for newly incorporated manufacturing companies. The social impact of the widening inequalities will be particularly adverse in a country that is grappling with the largely ineffective welfare programmes, widespread pilferage of the benefits meant for the poor, bureaucratic lethargy and corruption. The rich-poor gulf calls for reviewing the taxation system. At the same time, pro-poor policies are needed to effectively achieve poverty alleviation. According to the Global Multidimensional Poverty Index 2022, over 41 crore people were pulled out of poverty in India in 15 years, starting from 2005-06. Though this is a heartening development, the job is only half done as India still accounts for the largest population of poor citizens. The world’s fifth largest economy must make greater efforts to reduce various forms of inequality — including pay disparity between male and female workers — to ensure equitable growth. The Centre must keep these new realities in view while formulating the Budget. There is an urgent need to design schemes specifically to help the poor recover faster. The coming Budget must focus on bridging the economic divide by putting money directly into the hands of the poor and devising specific schemes to reduce urban poverty.
