The richest 1% of India’s population owned more than 40.5% of the country’s total wealth in 2021, while the bottom 50% of the population only accounted for around 3% of it, non-profit group Oxfam India said in a report released on Monday.
The combined wealth of India’s 100 richest persons reached Rs 54.12 lakh crore in 2022, Oxfam said in its report titled “Survival of the Richest: The India Supplement”. The total wealth of the 10 richest Indian stood at Rs 27.52 lakh crore in 2022, a 32.8% rise from 2021.
The total number of billionaires also increased in India from 102 in 2020 to 142 in 2021 and 166 in 2022. In a stark contrast 22.89 crore persons live in poverty in India – the highest in the world, the report said. It added that taxation could exacerbate inequalities if tax structures are not progressive in nature.
In a progressive taxation system, the tax rate increases as the taxable amount increases. Oxfam India pointed out that in India, while the income tax rates are based on income, indirect taxes are the same for all individuals irrespective of their earnings.
“Heavy reliance on consumption taxes like VAT [Value Added Tax] increases inequality and is regressive in nature because poor people pay a larger share of their incomes,” the non-profit said.
The report said that the bottom 50% of the country’s population pays six times more on indirect taxation as a percentage of income as compared to the top 10%. Of the total taxes collected from food and non-food items, 64.3% was incurred by the bottom 50% of the population.
The non-profit group recommended imposing a wealth tax to generate more government revenue, which can be redirected to the development of the country. It said that a one-off tax on unrealised gains from 2017–2021 on India’s richest person – Gautam Adani – could have raised Rs 1.79 lakh crore, enough to employ more than 50 lakh Indian primary school teachers for a year.
Unrealised gains are increases in the value of assets that have not yet been sold. These are notional profits which can be gained if the sale of the assets takes place.
Oxfam also called for a reduction in Goods and Services Tax rates on essential commodities and increasing them on luxury goods. Commenting on the data, Oxfam India’s Chief Executive Officer Amitabh Behar said that the time has come to ensure that the rich pay their fair share of taxes.
“The country’s marginalised – Dalits, Adivasis, Muslims, Women and informal sector workers – are continuing to suffer in a system which ensures the survival of the richest,” he said.
He urged the finance minister to implement “progressive tax measures” such as wealth tax
and inheritance tax in order to tackle inequality in an effective manner.