‘Survival of the Richest: The India Story’

 

A Republic Day Special

‘Survival of the Richest: The India Story’

The Preamble to the Constitution of India says India is a ‘Socialist Democratic Republic’ where all its citizens are assured of Justice-social economic and political- and Equality of status and of opportunity to lead a life of dignity. The Directive Principles of State Policy (DPSP), make India a welfare state.

 

The Article 39 of the DPSP says, “The State shall, in particular, direct its policy toward securing-(a)that the citizens, men and women equally, have the right to an adequate means of livelihood;(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; and (c) that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment.” All the pious assurances are belittled. And, after 75 years of Independence, India has emerged as the poorest country with the richest persons in the world. It is paradoxical, the divide between the rich and the poor is growing geometrically.

 

The Oxfam (Oxford Committee for Famine Relief, founded in Britain in 1942), in its Report ‘Survival of the Richest: The India Story’ 2023 says 5% Indians owned over 62% of total wealth, while the bottom 50% of the population possessed 3% of wealth. The total number of billionaires in India increased from 102 in 2020 to 166 in 2022; 40.5% of wealth owned by top 1% of Indians. The combined wealth of India’s 100 richest has touched $ 660 billion (54.12 lakh crores); 1% of wealth tax can fund the Union budget for more than 18 months; 21 billionaires owned the wealth equivalent to 700 million Indians. If India’s billionaires are taxed at 2% on their wealth, it can feed the malnourished for 3 years. The State earns 27% of revenue from the GST- which is indirect tax on essential daily consumer items- the largest chunk as compared to the Corporate Tax and the Income Tax.  And 64% of the GST is paid by the bottom 50% of the population, while 4% of the GST paid by the top 10%. It means the poor are spending their meagre earnings on consumption of essential food items and paying more GST, while the rich and affluent pay very less GST.  

 

According to Amitabh Behra, CEO, Oxfam India, the welfare schemes like free ration, direct transfer of money, Jan Dhan Yojna etc. have not trickled down to the poor and the quality of life in the countryside has not improved. The people are so poor that it is beyond their means to buy a gas cylinder that costs more than Rs.1200.00. The Banks have written off bad loans of corporates worth Rs 10,09,511 of the past five financial years, as per the statement made by the Finance Minister Nirmala Sitharaman in Parliament during the last winter session, while the poor get no such relief for petty loans they take from banks. In fact, all sorts of coercive methods are adopted to recover the loans from them. Further, the reduction of Corporate Tax from 30% to 22% favors the super-rich. The policies and the strategies of the government are favoring them.

 

The UNDP report 2020 says that, in a decade from 2005, Indian lifted 271 million people out of poverty. However, this arrest of poverty was reversed in 2020 due to the shocking sudden harshest nationwide lockdown that wreaked havoc on the economy and livelihoods, with 230 million people pushed back into poverty, according to Azmi Premji University Report. Millions of Indians were rendered jobless overnight, losing everything they had, the middle and low-income groups and small and medium industries being hit the hardest. They were left high and dry-to mend for themselves.

 

Gautam Adani is not only Asia’s richest and the world's third richest person, but also the top gainer by making more billions than anyone else on the planet in 2022. During the pandemic, his wealth has increased eight times. He earned $ 49 billion and $47 billion in 2021 and 2022 respectively and his net worth is estimated at $124 billion in 2022.  Mukesh Ambani’s net worth in 2022 is estimated at $ 94 billion. Adani and Ambani Group of Companies own most of the major industries such as ports, airports, banks, media houses, mines, Cement, Gas, Power and Public Sector Assets etc., monopolizing the capital, earning and accumulating the wealth detrimental to the common good. It is a plunder of national resources and public assets, unparalleled in independent India.

 

The State’s debt burden has reached alarming proportions. India is spending 40% of its tax revenues on paying interest on debt, with the debt making an astronomical 90% of th GDP. According to Professor Gaurav Vallabh, the total debt per Indian over the past nine years of the present regime has increased by 2.5 times as compared to 2014. The outstanding debt of the Government of India was Rs.55.87 lakh crore as on March 31,2014, which is estimated to touch Rs.155.31 lakh crore by March 2023. And every Indian will have a debt burden of Rs. 1..1 lakh, as against Rs. 43,000 in 2014. The massive borrowings are resulting in K-shaped recovery of economy and concentration of wealth in the hands of a selected few-crony capitalists. The K-shaped recovery means that consumer spending is booming at the top, while the bulk of the population- the lower part of the K- is struggling with unemployment, inflation and stagnant consumer spending. That is how the Mercedes sales had a reord growth of 41% in 2022.  

 

What we see is obscene inequalities in terms of poverty, deprivation and malnutrition. India is a home for the largest number of the poor and the malnourished in the world. In the Global Hunger Index 2022, India ranks at 107 out of 121 countries. On average an Indian is spending more than 60% of his pocket expenses on health, as against 18% in the rest of the world.   And with massive privatisation of education and health, the poor and marginalised are deprived of access to good public education and public health. The Union government doesn’t spend even 2% of GDP on these essential services, when India’s neighbouring couriers and the developed countries spend a substantial amount of GDP on these services.

 

At the recently concluded Davos Summit on Climate in Switzerland, a delegate was required to pay more than $.120,000. And more than 3000 delegates participated in the Summit. When there is growing divide between the rich and the poor, the question we should ask is: how many people get two square meals a day and meet the minimum basic needs. The wealth of the top 1% super-rich has increased by 26 trillion dollars during the past two years- more than twice that of the bottom 99% of population. Apart from income and wealth disparities, we are seeing widening disparity in access to education. Only 15% of children in rural India had access to online education during the pandemic, accounting for massive loss of their education.  

 

Ambedkar, in his speech in the Constituent Assembly on November 25,1949, had warned: “If we ignore the peril of increasing inequality in Indian society, then those who suffer from inequality will blow up the structure of political democracy which we have so laboriously built up.”  And unless the obscene economic inequality is addressed and concentration of wealth checked by ensuring fair distribution of the wealth generated, it may lead to political and social disruption. Better public education and health system are the drivers of social equality.

It is important to impose wealth tax on the super-rich not only to bridge the growing divide between the rich and the poor, but also to generate revenue required to fund the education and health and other essential services to more than 80 core poor Indians who survive on the food subsidy. What is needed is massive public investment in education and health to pre-empt pollical and social disruption.