India’s story: Survival of the richest

The latest global report of Oxfam, a non-government organisation, has presented a bleak picture of widening inequality all over the world, and particularly in India. The report titled “Survival of the Richest: The India Story,” says that the richest 1% of the population in the country now own more than 40% of its total wealth, while the bottom half shares only 3%. Just 21 individuals own as much wealth as 700 million people have. The rich actually became richer during the Covid years when most others became poorer. From the outbreak of the pandemic to November 2022, billionaires in India have seen their wealth go up by 121%, or Rs 3,608 crore per day. The number of billionaires increased form 102 in 2020 to 166 in 2022. The conclusion is inescapable that the country is becoming more and more unequal.

A society where people are equal is only an ideal. But when inequality grows, it mostly means a transfer of wealth from the poor to the rich. It is a moral, social and political issue. Policies of governments contribute majorly to the way wealth is distributed and so they become answerable when poverty increases and the gap between the rich and the poor widens. When the government claims that it has taken a host of measures to help the poor, as the Narendra Modi government frequently does, that does not mean the reduction of poverty. Welfare measures support people but real poverty alleviation happens only when people earn more, have independent incomes, and do not have to depend on government giveaways. India has lifted large numbers of people from poverty through the decades, especially between 2004 and 2016, but the trend has slowed down in recent years. Millions of people slipped back into poverty after demonetisation and during the Covid years and have not recovered since. The Oxfam report brings into focus the increasing pauperisation that is taking place and the cornering of the largest chunks of society’s wealth by a tiny section of privileged people. This can lead to social distress, discontent, and unrest. India’s case is not special, and the report says that the world’s richest 1% have grabbed nearly two-thirds of all new wealth, about $42 trillion, created since 2020. But the report is more relevant for India because India is home to the largest number of poor people in the world.

The report has sought an increase in taxes on the super-rich and one-off wealth taxes and windfall taxes to reduce the rich-poor gap. That can help partly fund the solution, but the solution itself is to improve the social and economic conditions of the people at the bottom levels of society.