India’s wealth inequality on full display: top 10 richest hoard Rs 27.52 lakh crore while poorest 50% bear 2/3rd of GST burden

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As the world continues to grapple with the economic and social fallout of the COVID-19 pandemic, a new report from Oxfam highlights the stark reality of wealth inequality in India. According to the report, titled “Survival of the Richest: The India Story,” the combined wealth of India’s 100 richest individuals has reached an astronomical Rs 54.12 lakh crore, with the top 10 richest holding a staggering Rs 27.52 lakh crore – a 32.8% increase from 2021.

But it’s not just the sheer amount of wealth held by the super-rich that is cause for concern – it’s the disproportionate distribution of that wealth throughout the population. The report states that the top 1% of the population holds 40.6% of India’s total wealth, while the bottom 50% holds just 3%. This inequality has only been exacerbated by the pandemic, with the bottom 50% seeing their wealth continue to shrink.

“Following the pandemic in 2019, the bottom 50% of the population has continued to see its wealth chipped away. By 2020, their income share was estimated to have fallen to only 13% of the national income and less than 3% of the total wealth. Its impact has been exceptionally poor diets, increase in debt and deaths,” the report states.

But it’s not just the bottom 50% that is shouldering the burden of inequality – it’s also the majority of India’s taxpayers. Despite popular belief that only a small number of Indians pay taxes, the Oxfam report shows that it is actually the poorest 50% of the population that is paying the majority of indirect taxes, or consumption-related taxes. According to the report, 64.3% of the total GST is being paid by the bottom 50%, while just 3-4% is being paid by the top 10% of the population.

This disparity is also evident in the percentages of income that different income groups are spending on indirect taxes. The bottom 50% is spending 6.7% of their income on taxes for select food and non-food items, while the middle 40% is spending just 3.3%. But the top 10% is spending a mere 0.4% of their income on these items.

To address this inequality, the report recommends reducing GST slabs on essential commodities and increasing taxes on luxury goods. “This will lead to revenue generation, which is progressive in nature and reduces the burden on the poor,” it states. Additionally, Oxfam calls for the imposition of a wealth tax on all Indian billionaires, suggesting that a 3% wealth tax on the total wealth of billionaires could fund the National Health Mission, the largest healthcare scheme in India, for five years.

As the report states, “The survival of the richest is not the India story. It is time for the government to ensure that the country’s wealth is shared more equitably to create a more equal, just and resilient society for all.”