New Delhi, Jan 15: The richest top five per cent of Indians now own 61.7 per cent of the total wealth, according to a report by Oxfam India. The report further says that one per cent of Indians now own over 13 times more wealth than the bottom 50 per cent.
According to the “Survival of the Richest: The India Supplement”, released by the global advocacy organisation, wealth inequality gets denser on the top. More than half of the wealth of the top 10 per cent of richest Indians is owned by the top 1 per cent.
The share of the top 10 per cent in India’s total wealth has risen from 45 per cent to 63 per cent between 1981 and 2012. On the other hand, the wealth of the bottom half halved during the same period.
As per the report, the burden of the tax falls invariably high on the poor. The bottom 50 per cent income group spends a higher percentage of their income on indirect taxes than the middle 40 per cent and the top 10 per cent combined.
The top 10 per cent spend the least percentage of their income on taxes among the three groups.
Sixty-four per cent of all Goods and Services Tax (GST) collections come from the bottom 50 per cent and 4 per cent from the top 10 per cent. The report also said that the bottom 50 per cent of the population pays six times more on indirect taxation than the top 10 per cent.
“Estimates suggest that the bottom 50 per cent spends 6.7 per cent of their income on taxes for select food and non-food items. Middle 40 per cent spends half of that at 3.3 per cent of their income on food and non-food items. However, the top 10 per cent wealth group spends a mere 0.4 per cent of their income on these items,” the report said.
Moreover, inequality has become worse since the onset of the Covid-19 pandemic.
“The top 5 per cent have continued to see their prosperity rise to owning around three-fifth of the total wealth in India (nearly 62 per cent), which is higher than the pre-pandemic years,” it said.
“While the country suffers from multiple crises like hunger, unemployment, inflation and health calamities, India’s billionaires are doing extremely well for themselves. The poor meanwhile in India are unable to afford even basic necessities to survive. The number of hungry Indians increased to 350 million in 2022 from 190 million in 2018,” said Amitabh Behar, chief executive officer (CEO) of Oxfam India.
Inequality also changes with location, gender and caste. The bottom 50 per cent of those living in rural India pay 3 per cent more tax than the bottom half of the urban population.
Between 2018 and 2019, female workers earned 63 paise for every 1 rupee a male worker earned.
For Scheduled Castes and rural workers, the situation is worse. During the same period, SCs earned 55 per cent and rural workers 50 per cent of what the advantaged social groups and urban workers earned, respectively.
Way forward
“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy,” said Gabriela Bucher, executive director of Oxfam International.
The organisation suggested a reduction in the GST slabs on essential commodities. The rates can be hiked for luxury goods. It also suggested raising taxes on capital gains, which are subject to lower tax rates than other forms of income.
Additionally, the wealth of the top 1 per cent should be taxed on a “permanent basis” with higher rates for millionaires, multi-millionaires and billionaires.
It added that the Centre should ensure workers in the formal and informal sectors are paid basic minimum wages.
