The Background
India’s inequality has risen phenomenally during the time of the COVID-19 pandemic. The recent Oxfam report on economic inequality in India revealed that the total number of billionaires in India has increased from 102 in 2020 to 166 billionaires in 2022 while the country has the world’s highest number of poor at 228.9 million. The wealth of the top 10 richest stands at INR 27.52 lakh crore – a 32.8 per cent rise from 2021.
Oxfam India’s estimates reveal that:
- Three per cent of wealth tax on the Indian billionaires can fund the National Health Mission, the largest healthcare scheme in India with an allocation of INR 37,800 crores for 3 years.
2. Taxing the top 10 billionaires at 5 per cent will help cover the entire cost of Tribal healthcare for five years.
3. In FY 2021-22, at full coverage, it was estimated that INR 42,033 crore was required to fund the Supplementary Nutrition Programme (SNP). Taxing all of India’s billionaires at 2 per cent would support the requirement of INR 42,033 crores for the nutrition of the malnourished in the country for 3 years.
4. To raise the expenditure on health to 3 per cent of the Gross Domestic Product (GDP), a total expenditure of INR 1,06,600 crores would be required. This money can be raised by taxing the top 100 billionaires at 2 per cent.
5. The funds for Samagra Shiksha – the largest centrally sponsored scheme (CSS) on school education in India in 2022-23 were much lower (INR 37,383 crores) than what was asked for (58,585 crores) by the education ministry in 2021-22. Taxing the wealthiest 10 billionaires at 1 per cent would be enough to cover this shortfall for 1.3 years. Taxing them at 4 per cent would cover the entire amount of funds required for two years.
6. A total amount of INR 1.4 lakh crore would be required to bring back out of school children to school and provide them with quality education. Taxing the top 100 Indian billionaires at 2.5 per cent, or taxing the top 10 Indian billionaires at 5 per cent would cover the entire amount required to bring the children back into school.
7. The NEP 2020’s proposal to supplement the mid-day meal scheme with a breakfast scheme was rejected by the Union Ministry of Finance stating paucity of funds. If one calculates the resources required to serve the students in government schools with breakfast, the government would require INR 31,151 crores. Taxing the wealthiest 100 Indian billionaires at 2 per cent would cover the cost of running this scheme for nearly 3.5 years.
8. To fill the vacancies at elementary schools, an amount of INR 2040.3 crores would be required. This can be raised by taxing the 10 richest Indian billionaires at 1 per cent, which can fund the required amount for 13 years. Taxing the 100 richest Indian billionaires at 1 per cent can fund the vacancies for 26 years.
The rising inequality must be addressed immediately. It recommends following measures:
- Taxing the wealth of the richest 1 per cent: The wealthiest elites have undue influence over policy making and politics, which allow them to accrue even more wealth. We must break this vicious cycle. This means taxing the net wealth of the top 1 per cent on a permanent basis, with higher rates for millionaires, multi-millionaires and billionaires.
2. Easing the tax burden on the poor and the marginalized: The government should reduce the GST slabs on essential commodities, which form the majority of the poor and middle classes spending habits, and hike the taxes on luxury goods. This will lead to revenue generation, which is progressive in nature and reduce the burden on the poor.
3. Improve access to public services like health and education:
- Enhance the budgetary allocation for health to 2.5 per cent of GDP by 2025, as envisaged in the National Health Policy, to reinvigorate the public healthcare system, reduce Out-of- pocket (OOP) expenditure and strengthen health prevention and promotion.
- Establish medical colleges with district hospitals, particularly in hilly, tribal or rural areas where health infrastructure is poor. This would facilitate the availability of medical services and human resources as well as increase the number of medical professionals in the country.
- Strengthen Primary Health Centres (PHCs), Community Health Centres (CHCs) and government hospitals with adequate number of doctors, nurses, paramedics, equipment and other infrastructural requirements as per Indian Public Health Standard (IPHS) norms to make quality health service available within kilometers radii of peoples’ residence or workplace.
- Enhance the budgetary allocation for education to global benchmark of 6 per cent of GDP, as committed in the National Education Policy. The government must frame a year wise financial roadmap to achieve the 6 per cent mark.
- Reduce existing inequalities in education by spending more on programmes (for example: Pre Matric and Post Matric scholarships) meant for improving the educational status of students from marginalized sections (SC/ST/Girls).
- 4.Strengthen safety nets and bargaining power of labour
- Inflation and, consequently, rise in cost of living hurts the poor and middle class more. 90 per cent of India’s labour force in the informal economy is without any safety net to protect them from the heavy blows to the economy. To this end, it is essential to ensure social protection for our workforce, especially those in the informal sector, and strengthen monitoring and tracking mechanisms that ensure protection of the labour class of the country.
