Unprecedented Inequality in the ‘Billionaire Raj’
Sanjay Roy
IT is the time when Instagram feeds will be flooded with photos and reels of the mega fortnight marriage event of the Ambanis and the eye balls of average Indians would be rolling to follow the spectacle of wealth, offering glaring evidence of the billionaire raj that India could produce at the end of three decades of neoliberal reforms. According to the latest study of the World Inequality Lab, India’s inequality levels have reached unprecedented levels, highest ever since 1922. The richest 1 per cent of Indians in 2022-23 account for 22.6 per cent of national income which was around 13 per cent during the time of independence, further came down to 6 per cent in 1982 and then after three decades of reforms reached a level which is higher than what the income shares of 1 per cent rich accounted during the inter-war years. The study also reports high wealth concentration among the rich showing a widening gap in income shares and wealth shares of top 1 per cent during the reform period.
The ‘billionaire raj’ of the reform period has emerged to be far more unequal than the ‘British Raj’. Neoliberal reforms have led to declining shares of wages vis-à-vis profits, rising gap in access to education and resources between the rich and the poor, restricted inter-generational mobility and devastating impact on the voice and bargaining power of the poor and the working class. The richest ten thousand individuals earn 2069 times of what an average Indian earns. The income share of the rich has increased at the expense of the bottom 50 per cent and middle 40 per cent of the Indians. Increased commodification of erstwhile publicly provisioned services and the social process of commercialising life through the exclusionary logic of market had given rise to this unprecedented inequality. The social contestations emerging in this context have been managed by mobilising masses on the basis of religious identities and also by deflating issues of rights and claims by variable targets of micro welfare schemes that provide relief to bare subsistence.
HIGHEST IN THE WORLD
The top 1 per cent of Indians account the highest share of national income in the world in 2022-23, higher than that recorded in South Africa, Brazil and the US. They are the real gainers of the market economy while the bottom 50 per cent and the middle 40 per cent of Indians lost their shares during the same period. The top 10 per cent of the rich during Independence accounted for 40 per cent of the share in national income and now in 2022-23 their share in the national pie has increased to 60 per cent. While the share of bottom 50 per cent has fallen from 22.4 per cent in the beginning of the 1990s to 15 per cent in 2020. The income shares of the middle 40 per cent has come down from 42.8 per cent in 1951 to 27.3 per cent in 2022. This clearly shows that the growth of incomes of the rich in India has come at the expense of the bottom and the middle. A section of the upwardly mobile middle class who apparently gained out of the process of liberalisation and has been showcased as the success stories to be followed, increasingly lost its steam.
The study also shows that the number of Indians with net worth exceeding one billion US dollars at market exchange rate listed in Forbes billionaire ranking has increased from 1 in 1991 to 52 in 2011 and now 162 in 2022. During the same period, India’s ranking in terms of human development and hunger index worsened. The rich in the Forbes billionaire list in the beginning of the neoliberal reform in 1991 accounted only 1 per cent of India’s national income which has increased to 25 per cent in 2022. Hence the super-rich billionaires with a count of 162 account for one-fourth of India’s national income. The net worth of billionaires of India grew almost 10 times faster than the growth of national income during the reform period. This precisely shows how vacuous the claims of ‘trickle down’ theory has been and that however continues to be the dominant thought process of the policy makers. Neoliberal reform has created series of spectacles triggering aspirations on the basis of a core belief that market treats every one as equal and therefore it is only about individual efforts that brings success to anybody who is passionate about realising her own dreams. True, successes of individuals depend on their passion and capabilities but these are not independent of the structural factors that continuously create restrictions to accessibility of resources. The mega story peddled through media and by other various modes of cultural interventions is to invisiblise these structures which are very much operational through class, caste and gender relations conditioning outcomes which are immensely skewed in favour of the rich and otherwise powerful.
ELITE CAPTURE
It is also important to note that India’s aggregate wealth to income ratio increased from 3.83 in 1995 to 5.75 in 2022. The gap between the income shares and the wealth shares of the top 10 per cent increased over time reflecting a cumulative amassing of incomes subsequently converted into stocks of wealth. It is also a reflection of concentration of economic power which translates into political power as the rich could increasingly influence governments to increase the ambit of market which essentially reserves their privileged access to resources at an extended scale but in the guise of equal participation in markets.
The poor and the middle class are excluded in the market as goods and services increasingly become unaffordable with declining real incomes. It appears as if there is nothing wrong being excluded by the neutral rules of demand and supply that determines price and applies to all but essentially it is an exclusion where the field of the game is highly skewed in favour of the rich. Ironically the sustenance and perpetuation of rising economic and political power of the rich in Indian society goes hand in hand with a functioning vibrant democratic system where people have equal rights to choose their own governments. This also draws our attention to a more fundamental question that how come India with a regular functioning parliamentary democracy could not contain this rising inequality? And in spite of so many accusations upon ‘autocratic regimes’ of China and Vietnam by popular media, not only they surpassed India in terms of per capita income but could put a restraint on rising inequality. Per capita income of India in 1970 was higher than that of China’s and now per capita income of China is 2.5 times that of India’s and Vietnam’s per capita income is 35 per cent higher than India’s. More importantly since 2000s China grew much faster than India and the rising inequality during the high growth period stabilized in case of China but in case of India it skyrocketed during the liberalised regime.
If the essence of democracy is to widen the scope of peoples’ voice in the economy and polity and guarantee equitable access to resources and opportunity, then mere participation in voting might not be enough to ensuring democratic practice. The necessary condition is to break the elite capture of Indian democracy by empowering people through struggles against unequal access to properties and resources.
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