Editorial: Unequal Republic
Economic inequality is an unfortunate truth the world has to live with. What is more disturbing is the widening gulf between the rich and the poor, despite a surfeit of welfare models being experimented across the world. The ongoing coronavirus pandemic has made the world more unequal, with wealth distribution becoming more skewed than ever […]
Economic inequality is an unfortunate truth the world has to live with. What is more disturbing is the widening gulf between the rich and the poor, despite a surfeit of welfare models being experimented across the world. The ongoing coronavirus pandemic has made the world more unequal, with wealth distribution becoming more skewed than ever before. This is true of not just India but of the entire world. The latest Oxfam report has brought to the fore the disturbing realities of wealth distribution. It says that while 4.6 crore Indians are estimated to have fallen into extreme poverty in 2020, the number of Indian billionaires grew from 102 to 143 during the pandemic period. The income of 84% of households in the country declined in 2021, marked by unprecedented loss of livelihoods, while the wealth of billionaires between March, 2020 and November 2021 increased from Rs 23.1 lakh crore to Rs 53.2 lakh crore. The bitter reality is that 142 Indian billionaires own more wealth ($719 billion) than 555 million people ($657 billion) who constitute the bottom 40%. Indian billionaires have seen their combined fortunes more than double during the pandemic. The surge in the number of billionaires came at a time when India’s unemployment rate was as high as 15% in urban areas and the healthcare system was on the brink of collapse.
As if the socio-economic inequalities are not enough, India’s healthcare budget saw a 10% decline from revised estimates of 2020-21. There was a 6% cut in allocation for education, the Oxfam report has pointed out. The budgetary actual allocation for social security schemes declined from 1.5% of the total union budget to 0.6%. The pandemic has also widened gender disparity. Women have collectively lost Rs 59.11 lakh crore in earnings in 2020, with 1.3 crore fewer women in work now than in 2019. It is also ironic that the poor and middle classes have been paying high taxes despite going through the raging pandemic while the rich made more money without paying their fair share. Government tax revenues are disproportionately dependent upon indirect taxes like the goods and services tax. This makes all people — the rich as well as the poor — who buy a product or use a service pay tax at the same rate, irrespective of their economic conditions. There is no doubt that higher taxation, targeting the super-rich, could help in reducing inequality. Recently, 130 countries, including India, came together and agreed on a global minimum corporate tax rate of 15% in an effort to overhaul the taxation rules for international companies. The landmark agreement, which came after years of intense work and negotiations, will ensure that large multinational corporations pay their fair share of tax everywhere. For decades, big corporations have exploited the loopholes in the taxation laws to avoid taxes.
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