The Inequality Issue

The Inequality Issue

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#InequalityIsUnacceptable. So, what is the Inequality Issue? 

THE PROBLEM

At the top: The total number of billionaires in India increased from 102 in 2020 to 166 billionaires in 2022. The combined wealth of India’s 100 richest has touched $660 billion (INR 54.12 lakh crore) – an amount that could fund the entire Union Budget for more than 18 months.

• Richest 21 Indian billionaires have more wealth than 700 million Indians.

• Since the pandemic begun to Nov 2022, billionaires in India have seen their wealth surge by 121%, or INR 3608 Crore1 per day in real terms.

• Just five percent of Indians own more than 60 percent of the country’s wealth while the bottom 50 percent of India’s population possess only three percent of wealth.

• From 2012 to 2021, 40 percent of the wealth created in India has gone to just one percent of the population and only a mere 3 percent of the wealth has gone to the bottom 50 percent.

• The projected revenue foregone by the Union Government in 2020-21 in the form of incentives and tax exemptions to corporates was more than INR 1,03,285.54 crores.

THE DRIVERS

First, COVID-19 pandemic hit India which was already divided on the lines of caste, class, gender, and religion. After 30 years of neoliberalisation, the Government of India was struggling to provide healthcare, education, housing, decent wages, and food to all its citizens even before the pandemic. The massive privatisation, erosion of workers’ rights and tax cuts for the rich has left the poorest vulnerable to exploitation. Yet, the government continues to prioritise the welfare of rich over the poor in post covid recovery. This approach has to change.

Second, billionaires and corporates have benefitted from several crisis in India – be it COVID-19 vaccine, the war in Ukraine or rising inflation.

At the same time:

• The number of hungry Indians increased to 350 million in 2022 from 190 million in 2018.

• The widespread hunger is resulting in 65 per cent of the deaths among children under the age of five in 2022, according to the Union Government’s submission to the Supreme Court.

• Approximately 4500 children die every day under the age of five years in the country due to hunger and malnutrition.

Even after witnessing mass death and suffering in COVID-19 pandemic, the government has not taken significant steps to fight inequality.

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THE TITANS PROFITING FROM PAIN

The billionaires are ultimate beneficiaries of crisis, mass suffering and government apathy.

• The healthcare industry has 32 billionaires with names such as Cyrus Poonawalla, Dilip Sanghvi and Murali Divi leading the sector. The manufacturing industry currently has 31 billionaires and Ashwin Dani, Benu Gopal and Mahendra Choksi are the top three richest. 

• Indian billionaire Gautam Adani, owner of major energy corporations, has seen this wealth soar by $42 billion (46 percent) in 2022 alone.

• Roughly 19% of the Indian billionaires come from the private healthcare and pharmaceutical industry, which was greatly boosted following the onset of the COVID pandemic. 

• In 2020 itself, there were seven new billionaires in the healthcare and pharma industry, with their combined wealth reaching Rs. 4.35 trillion by early 2021.

THE SOLUTIONS

The Governments, business leaders, and billionaires celebrate India’s economic growth as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years. Among the increased number of world’s poor, 1/3rd are from India. The government must recognise this.

The single most urgent and structural and strategic action that the Union Government must take now is —to put it clearly— to tax the richest. The revenue generated from this tax collection must be spent on universal healthcare, Right to Education and social protection for India’s informal sector workers.

We want to see:

1: Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering. 

2: Permanently increase taxes on the richest 1 percent. 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.

3. Enhance the budgetary allocation of the health sector to 2.5 per cent of GDP by 2025, as envisaged in the National Health Policy, to reinvigorate the public healthcare system, reduce OOP expenditure and strengthen health prevention and promotion.

4. Strengthen Primary Health Centres (PHCs), Community Health Centres (CHCs) and government hospitals with adequate number of doctors, nurses, paramedics, equipment and other infrastructural requirements as per Indian Public Health Standard (IPHS) norms to make quality health service available within 3 Km radii of peoples’ residence or workplace.

5. Enhance the budgetary allocation for education to the global benchmark of 6 per cent of GDP, as also committed in the National Education Policy. The government must frame a year wise financial roadmap to achieve the 6 per cent mark.

6. Reduce existing inequality in education by spending more on programmes (for example: Pre Matric and Post Matric scholarships) meant for improving educational status of students from marginalized sections (SC/ST/Girls).

Above all, we want to see a shift in imagination from governments. A reckoning that more of the same —more billionaire wealth, and a deeper plunge into a cost-of-survival crisis— is the definition of insanity and more suffering for billions. We need to lean on evidence, but also look to history, and what ordinary people are calling for around the world.

Survey after survey shows that across political divides the majority people support raising taxes on the rich. For example, 80% of Indians, 85% of Brazilians and 69% of people polled across 34 countries in Africa support increasing taxes on the rich. Even in countries with highly polarized political divides, surveys show that a majority of conservatives supports taxing the rich more.

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