Richest One Per Cent In India Own More Than 40% Of Nation's Wealth, Says Oxfam Report

The billionaires' fortunes increased by almost 10 times over the?decade and their total wealth is higher than the entire Union budget of India for the fiscal year 2018-19, which was at Rs 24,422 billion, according to the report.

The Oxfam report notes that Tesla and SpaceX boss?Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3 per cent during 2014-18. Aber Christine, a flour vendor in Uganda, makes $80 a month and pays a tax rate of 40 per cent, as per the report. The comparison shows?the disproportionate tax system by governments which helps the rich become richer and further marginalizes the poor.

Being one of the fastest growing economies and aspiring world power, India is also one of the most disparate countries, notes?Oxfam report. Wealth inequality has sharply risen in India, which is already fragmented along the lines of caste, gender, and religion.?

The repor notes that the richest have been able to accumulate surplus wealth?while millions of poor continue to struggle for minimum wages, quality education, access to healthcare services, and housing rights. The rise of the?richest comes most at the cost of women and children as education and healthcare services suffer from chronic under-investment and budget cuts.

The Oxfam report terms present times as "living through an unprecedented moment of multiple crises where tens of millions more people are facing hunger". With drastic climatic breakdowns, hundreds of millions struggle with impossible rises in the cost of basic goods or heating their homes. While climate breakdown is crippling economies, leading to frequent droughts, cyclones, and floods, causing internal and external displacement, the industrialists and capitalists continue to rejoice in the benefits of their doings.

Throughout India, millions are still dealing with the continuing impact of Covid-19, which has already killed over 20 million people, Oxfam's report highlighted. Small vendors, hawkers, and job seekers are grappling with the aftereffects of the pandemic and government-imposed lockdowns.

Findings And Numbers: What Does The Report Say

The top 10 per cent of the Indian population holds 77 per cent?of the total national wealth. Seventy-three per cent of the wealth generated in 2017 went to the richest 1?per cent, while 670 million Indians who comprise the poorest half of the population saw only 1?per cent increase in their wealth.

There are 119 billionaires in India. Their number has increased from only nine?in 2000 to 101 in 2017. However, during 2018-22, India is estimated to have produced 70 new millionaires every day. Billionaires' fortunes increased by almost 10 times over a decade and their total wealth is higher than the entire Union budget of India for the fiscal year 2018-19, which was Rs?24,422 billion.

Many ordinary Indians are not able to access the healthcare they need. Sixty-three?million Indians?are further pushed into poverty because of healthcare costs every year, almost two people every second.

It would take 941 years for a minimum wage worker in rural India to earn what the top-paid executive at a leading Indian garment company earns in a year.

While the Indian government barely taxes its wealthiest citizens, it's spending on public healthcare ranks among the lowest in the world. In the place of a well-funded health service, it has promoted an increasingly powerful commercial health sector. As a result, decent healthcare is a luxury only available to those who have the money to pay for it. While the country is a top destination for medical tourism, the poorest Indian states have infant mortality rates higher than those in sub-Saharan Africa. India accounts for 17 per cent?of global maternal deaths, and 21 per cent?of deaths among children below five years.

Wealth and income inequality in India

Wealth and income inequality in India calls for progressive tax measures such as wealth tax and inheritance tax.

India's poorest half pays two-thirds of GST, while top richest pay only 3 per cent, as per the Oxfam report.? Approximately 64 per cent?of the total Rs 14.83 lakh crore in GST came from the bottom 50 per cent?of the population in 2021-22, while 33 per cent?of GST comes from the middle 40 per cent?and only 3 per cent?of GST from the top 10 per cent, the report says. The bottom 50 per cent?of the population pays six times more on indirect taxes as a percentage of income compared to the top 10 per cent, as per the report.

The richest 1 per cent?in India now own more than 40 per cent?of the country's total wealth, while the bottom half of the population together share just 3 per cent?of the wealth

The Oxfam?report?says that the combined wealth of India’s 100 richest has touched $660 billion (Rs 54.12 lakh crore) – an amount that could fund the entire Union Budget for more than 18 months. The Adani group chairman Gautam Adani’s wealth alone increased eight times during the pandemic, and then nearly doubled to Rs 10.96 lakh crore according to Forbes in October 2022, making him the richest Indian.

“Roughly 19 per cent?of the Indian billionaires come from the private healthcare and pharmaceutical industry, which was greatly boosted following the onset of the Covid-19 pandemic. In 2020 itself, there were seven new billionaires in the healthcare and pharma industry, with their combined wealth reaching Rs? 4.3 lakh crore by early 2021,” the report highlights.

Making note of the huge amounts of loans written off by public banks mostly to corporates (Rs 11.17 lakh crore in the last six years till the financial year 2021-22), reduction in corporate tax slabs by the Union government in 2019 and other forms of tax exemptions, the report shows that on the other hand, the indirect nature of the GST and fuel taxes burdens the most marginalized.

“The subsequent increase in the prices of goods and services coerces them to spend a larger portion of their income on essential commodities,” says the Oxfam India report.

Noting the projected revenue foregone of the government in the form of incentives and tax exemptions to corporates, the Oxfam report?says, “In 2019, the Central Government reduced the corporate tax slabs from 30 per cent?to 22 per cent, with newly incorporated companies paying a lower 15 per cent rate. The projected revenue foregone by the Union Government in 2020-21 in the form of incentives and tax exemptions to corporates was more than Rs 1,03,285.54 crore. This is the equivalent to the allocation towards Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for 1.4 years.

Oxfam's recommendations

The Oxfam report gives many examples of how progressive tax measures could help fund the health and education sector.

"The time has come to tax the rich and ensure they pay their fair share," said Oxfam India CEO Amitabh Behar, as per Business Insider.

A one-off tax on unrealised gains during?2017–21 on just one billionaire, Gautam Adani, could ?have raised Rs. 1.79 lakh crore, enough to employ more than five million Indian primary school teachers for a year.

Taxing the top 10 Indian billionaires at 5 per cent?of their current wealth can help cover the entire cost of tribal healthcare for five?years, as per the report. It adds that if India’s billionaires are taxed once at 2% on their entire wealth, it would support the requirement of Rs 40,423 crores for the nutrition of malnourished in the country for the next 3 years

Oxfam India has recommended that the Union Finance Minister “introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering. The Finance Minister must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income. And also implement inheritance, property, and land taxes, as well as net wealth taxes.”?

Enhance the budgetary allocation of the health sector to 2.5 per cent?of GDP (gross domestic product) by 2025, and that of education to 6 per cent?of GDP, as committed in the National Health Policy and National Education Policy.

Pravas Mishra, part of the Oxfam's report?research team told Outlook?that the government?must take cognisance of the report's findings and recommendations.

He said, "We need to redistribute wealth among bottom 50 per cent. Drastic inequality will only negatively impact overall development, hence what we are suggesting does not go against?the idea of growth and development. It is necessary for sustainability."