Impose a 1% surcharge on the richest 10% of Indians to reduce inequality

A 4% wealth tax on 98 richest families can take care of the health ministry for more than two years

THE gap between the top 10 per cent asset holders and the bottom 10 per cent is 500 times in rural India but 50,000 times in urban India, reported Oxfam, five years ago. The latest India Supplement 2022, titled “Inequality Kills” by Oxfam reveals far worsening realities of inequality in India.

The process of rampant inequality development is not very recent, in fact, started long back. However, it got accentuated to phenomenally higher proportions since Modi took over the reins of the union government. This, almost eight years old government’s love for its crony corporates is not a hidden fact. This love for promoting these large giants at the cost of the people is the driving force for the current union government’s policy trajectory.

The report “Inequality Kills” vividly points out the hollowness of the sustainability of the current system of economic development. The much hullaballoo created in the national and international arena by our union government and its cohorts of meeting the universal standards of sustainable development goals(SDGs) also gets a drubbing. The findings if not scary are extremely revealing about the grotesque injustice being done by the current dispensation.

WHAT DOES THE REPORT SAY?

Highlights

·        When 84 per cent of households in the country suffered a decline in their income in a year marked by loss of life and livelihoods, the number of billionaires grew from 102 to 142.

·        The collective wealth of India’s 100 richest people hit a record of Rs 57.3 lakh crore in 2021. The share of the bottom 50 per cent of the population in national wealth was a mere six per cent. Whereas, the top 10 per cent held more than 45 per cent of the country’s national wealth.

·        As of now, the richest 98 Indians(Corporate Indians) own the same wealth as the bottom 552 million(55.2 crore people, which is roughly 40 per cent of India’s population).

·        Whereas India added 40 billionaires last year, i.e., 2020-21, the number of poor doubled during the same period, more than 4.6 crore Indians are estimated to have fallen into extreme poverty. This number is nearly half of the global poor according to the United Nations.

·        The level of inequality is so stark that the wealth of India’s 10 richest is enough to fund the school, higher education of every child for at least 25 years.

·        India is home to 25 per cent of all world’s undernourished children.

These figures are screamingly demanding proactive intervention from the Indian State. This also raises the important caution made by Dr B R Ambedkar, whilst speaking on the new Indian Constitution. His caution about the non-transformation from one person one vote(which was very radical in the contemporary period) to one person-one value. This non-transformation in the last 75 years to a highly inequitable society perils the very root of the democratic system.

REASONS FOR SUCH HIGH LEVELS OF INEQUALITY

The report summarises some of the important reasons for this grotesque inequality in the Indian social system.

Whereas the report focuses on the taxation system which substantially increased in the indirect tax form, thus shoring up wealth from peoples’ savings, it also mentions that this is not the ultimate area that requires redressal. For inclusive, sustainable and equitable growth the union government has to bring in large scale transformation which seems very difficult in the present scenario.

Health, education, taxation system, social sector spending, and over-centralisation of governance system are some of the important areas that contribute to these vast levels of inequality in the society.

The democratisation of the surplus generated in a social system is the only way at meeting the huge gap of inequality in a social system. Unfortunately, in the last few years instead of democratisation of the surplus generated, there has been a massive appropriation of it. And the union government, a principal tool for this democratisation has become a tool for the facilitation of appropriation for the cronies.

Take for example the health sector, where developing countries like Brazil, China spend far more than India. Brazil-9.51, China-5.35, Russia-5.32, South Africa-8.25 and India -3.54 per cent of the allocation on health. Not only is it important that the spending on health is increased but it is more on public health. The drive for insurance-driven health systems is more corporate profits and does not help in democratising the gains.

Likewise, the education sector contributes phenomenally in either reducing or increasing the gap of inequality in a social system. The Indian scenario over the last few years has been for more privatisation of education. The report points out that the proportion of India’s children attending a government school has now declined to 45 per cent; this number is 85 per cent in the USA, England-95 per cent and Japan-93 per cent. The government schools are either not being run properly or are being shut at a very fast pace.

According to a study, sending a child to a private school is approximately nine times the cost of a government school. And still, the government is not realising this basic fact.

WHAT THE REPORT MISSES?

Despite such a fantabulous articulation of the facts, the “Inequality Kills” report misses some of the important facts, especially in the urban sector that leads to very levels of inequality. The principal one is the transformation of utilities and urban commons for abject privatisation.

This goes to the basic understanding of the way the cities are built. The cities which over the years have been built to attract capital investments in various sectors like housing, infrastructure, health and even education has also led to the widening of inequality.

Most of this has happened by robbing the urban commons and the overall planning is done for such investments. Take for example the health sector. In recent years one will find that there is a push for secondary and tertiary health infrastructure rather than primary. Focus is more on curative and less on preventive. So, when a city plans its development trajectory there is more space for super speciality hospitals than for primary health centres. Gurgaon is a classic example of such development.

And over the years, the health sector in India has seen rapid strides towards privatisation. Since 1986-87, nearly 40 per cent urban population was dependent on private health care, which rose to 68 per cent in 2014 and for sure now surpasses 70 per cent, according to the report. Unfortunately, for the union government health is being viewed as an area of investment with good returns for the private sector. This industry(health-the government views it as an industry), is expected to touch the US $372 billion.

Another area that requires consideration is the way certain utilities considered to be of “use value” for the society have been transformed to “exchange value”, meaning commodifying such essential items. Take for example water. This debate of water being considered as a “right or need” is an old one that has reverberated in many world water forums guided by big capital. Access to quality water by the people is so quintessential for life. And if this is considered as only a need then water is also seen as a commodity for profit maximisation.

From March 2000 in Hague where the forum on water proclaimed themselves as saviours of the global water crisis in fact pronounced ideas for water privatisation and its utilities in the urban spectrum. There is a huge profit. No wonder companies like ‘Suez’ are not even leaving a small town like Leh from its ambit. One of the most essential commons- ‘water’ and its privatisation is another area leading to the widening of inequality in the urban centres. The ‘jal jeevan mission’, is another form of huge capital investments and recovering the cost of such investments by making the people pay for it.

Most of the infrastructure projects designed with high capital costs in cities bear a condition for reducing non-revenue water(NRW). There is nothing wrong with reducing NRW if it is to do with reducing the losses of water in a water utility in cities run either by the city governments or parastatals. The issue is that people are made to pay with this concept of reducing NRW and huge amounts of surplus are generated through this process. Another addition to this is the business of purifying water by companies despite the fact that the utilities are supposed to provide potable water to their residents.

Housing is another important area in the cities that leads to accentuating gaps of inequality. If one sees the trajectory of urban development from the urban planning process in the last four decades one will find that housing that had elements of social housing has been replaced with more market-oriented policies. The transformation from the old model towns to new master plans speaks volumes of this private aggrandisement.

Take for example the Delhi Master Plan for 2041. This is not to eulogise or be euphoric that the previous plans were very inclusive, they also had elements of exclusivity, but the new ones are completely different. In the previous master plans for Delhi, there was mention of social housing, the Janta flat, low-income housing, middle income etc. Then there was also a number of total housings decided how erroneously that may have been. But in the 2041 master plan, there is no mention of social housing, it is the market principle that will decide. And we all know what that principle is- 90 per cent of the city’s population cannot own such a house.

Finally, the suggestions made by the “Inequality Kills” report are worth mentioning but for that, there requires a political and social movement.

Democratising the surplus in the forms of larger investments from the State in education, health, etc., are of utmost importance. The report points out that a four per cent wealth tax on 98 richest families in India can take care of the ministry of health and family welfare for more than two years, the mid-day-meal programme of the country for 17 years. Similarly, estimates suggest that just one per cent wealth tax on 98 richest billionaire families can finance the Ayushman Bharat scheme for more than seven years.

All this is in the public domain and the people are not wary of the realities that they are facing. This inequality will lead to massive social tension which is not going to be healthy for either the country or the people. The point is, as pointed out it is not just the management of the taxes, it is the inherent social system that has to be transformed for a better world. Earlier the better!