For much of the first half of the year, visuals from the Ambani extravaganza loomed large in the media. The March pre-wedding and July wedding celebrations of Anant Ambani, son of tycoon Mukesh Ambani, are estimated to have cost Rs 5,000 crore, which is about half of India’s 2023-’24 National Social Assistance Programme budget of Rs 9,636 crore.

The gap between the ultra rich and ordinary Indians has been widening for decades. In 2022-’23, the top 1% of Indians owned 40.1% of the nation’s wealth. Though 70 lakh Indians have the living standards of First World residents, more than 70 crore Indians are poorer than the poorest in the Third World.

Despite these astounding numbers, wealth inequality – unlike in other parts of the world – has hardly ever been a mass issue in India before. But in the run-up to the Lok Sabha elections, India’s stark economic inequalities became a prominent theme in the Opposition bloc’s campaign. Since then, inequality has found mention several times in Parliament.

This increased focus is the result of the accelerated rate at which wealth has been becoming concentrated in recent years. Over the past five years, as per the Hurun Rich List 2023, India has seen a 76% increase in the number of people with a net worth of Rs 1,000 crore. At the same time, the country has slipped in the Global Hunger Index to 111 out of 125 countries in 2023 from 104 in 2022.

The discussion has been a long time coming. The support for a pro-business and market-centric economic ideology that has remained dominant since the 1970s has ensured that discussing fetters on wealth accumulation was out of bounds in political debate.

Such has been the unthinking belief in the trickle-down effect – the claim that wealth made by the few at the top of the economic pyramid will eventually benefit all those at the bottom.

However, much to the contrary, the state of the economy has rather been like a borewell that only pumps up. This market-centric model, coupled with the privatisation of basic services, has pushed the poor to the brink.

The fact that hyper-concentration at the top does not necessarily trickle down to those at the bottom is clear when one finds that even as the Indian economy grew, on average, by 6.7% between 2015-’16 and 2019-’20, the prevalence of anaemia among young children increased from 59% to 67%.

The rate was the highest – 80% – in the so-called high-growth model state of Gujarat.

In its first term, the Narendra Modi-led government reduced the overall tax liability of the super rich. In its 2015-’16 budget, it abolished whatever remained of a wealth tax and shifted entirely to a surcharge on income tax.

But as is the case with high-net-worth individuals, their personal income can be much slimmer than their wealth, which includes a wide range of assets, including real estate, shares, bonds and so on. Instead of rectifying the flaws in the variant of wealth tax India had, abolishing it completely has narrowed the country’s tax base for the super rich. In 2019, the surcharge on income above Rs 5 crore was fixed at 37% but in 2023, it was slashed to 25%.

Any suggestion that taxes on the ultra rich should be increased is met with claims that this will prompt businesses to move their capital out of India and that foreign investment will dry up.

As a result, it came as a breath of fresh air ahead of the 2024 Lok Sabha elections to see discussions and television debates about the redistribution of wealth, taxing the rich and the dangers of crony capitalism.

Even the urban, English-educated middle-classes, usually considered the beneficiaries of the high-growth economy, seem to be showing a growing concern about the lopsidedness of India’s economic structures.

A reflection of their concern is discernible in the volume of Google searches for the term “economic inequality” over the years. From mid-2000 until 2016, the trajectory of interest in the subject was flat. But it started to increase gradually from 2017 and after March 2020 climbed steeply.

The date is not surprising: it coincides with the Covid-19 lockdown that destroyed the economic health of the country’s poor even as the super rich got richer. For instance, businessman Mukesh Ambani’s net worth grew from $51.4 billion in 2019 to $92.7 billion in 2021. In the same period, Gautam Adani’s wealth jumped from $8.7 billion to $50.5 billion in 2021.

The pandemic put inequality centre-stage not just in India but around the globe. In April 2021, the United Nations Secretary General suggested that the increasing inequality could be cut by adopting a “solidarity or wealth tax” on the ultra rich who made money during the pandemic. Several countries – Argentina, Columbia, Spain, among them – implemented versions of it after Covid-19.

Meanwhile, discussions continue in the United Nations to ensure that developing countries receive a fair share of tax revenues from multinational corporations that are operating within their borders.

Though India’s ruling regime has been trying its best to brush the widening gap under the carpet of its divisive politics, the fallout has been too sharp to hide.

At one end, 8% of the world’s billionaires in 2023 were Indian, compared to 4.9% five years ago. At the other end, the household savings of ordinary Indians hit rock bottom. Reserve Bank of India data showed that the net financial savings of Indian households fell to a five-decade low in 2022-’23 to Rs 14.16 lakh crore, down from Rs 17.12 lakh crore in 2021-’22.

The luxury market is forecast to expand to 3.5 times by 2030, making India the fastest-growing luxury market globally. But those at the bottom are reducing their food expenses: the proportion of rural household spending on food has dropped to 46.38% in 2022-’23 from 52.90% in 2011-’12.

According to the International Labour Organization’s India employment report 2024, 62% of unskilled casual agricultural workers (who form 35% of the total population) and 70% of workers in the construction sector did not receive the officially prescribed daily minimum wages in 2022. Even the real wages of regular workers have either been stagnant or declining from 2012 to 2022.

Youth account for nearly 83% of the unemployed workforce, with nearly seven million to eight million young workers with few prospects being added to the labour force every year.

Government incentives offered to corporations in the form of tax breaks and concessions have failed to create adequate job opportunities. So much so that even the slow transition to non-agricultural jobs that had started has once again reversed in recent years.

Self-employment and unpaid family work, especially among women, are increasing while the proportion of regular employment – that had been increasing since 2000 – has been on the decline after 2018.

Despite Prime Minister Modi’s claim that India will become a $3-trillion economy by 2047, there is a stark inequality in the distribution of the economic growth.

There is an unwillingness to even acknowledge this disparity. Inequality found no mention in the Bharatiya Janata Party’s manifesto for the general elections. Modi, when asked during a television interview in May about growing income inequality in India, retorted, “Should everybody be poor?”

Finance Minister Nirmala Sitharaman made only two references to the problem in her post-election budget speech, making an outlandish claim of “bridging inequality” in the past decade.

However, in the Budget session that ended on August 9, Opposition parliamentarians such as Rahul Gandhi, Manoj Jha, Sagarika Ghosh and Shashi Tharoor parliamentarians repeatedly pointed to the misdirected economic policies that are allowing for a hyper-concentration of wealth in the hands of a few.

It has taken a while, but the concerns around widening inequality and the demand for taxing the super-rich are finally being discussed.

Anirban Bhattacharya and Nancy Pathak work with the National Finance team at the Centre for Financial Accountability, New Delhi.