Govt could look at taxation to address widening inequality
The wealthy got wealthier over the last calendar. The number of dollar billionaire promoters of listed Indian companies grew to 152 over the year, up from 126 in calendar 2022; their combined net worth went past $858 billion, a jump of 16 per cent from the previous year’s $739 billion.
The survey by a financial daily threw up a significant change—a widening of the list with many new entrants coming in on the back of successful IPOs. While Gautam Adani slipped to No 2 with an erosion of about 29 per cent in net worth (after the Hindenburg report triggered a meltdown in some Adani stocks), Mukesh Ambani was on top, growing a marginal 4.7 per cent to $112 billion. New promoter billionaires included Ramesh Juneja of Mankind Pharma, Pradeep Rathod of Cello, and T P Kabra of R R Kabel.
Wealth creation was not only at the very top. The creamy layer also seems to have bounced back from the Covid blues. Two bell-weather economic indicators have been ringing loudly. Passenger vehicle sales, driven by an array of SUV launches, have boomed past the 4-million annual sales mark for the first time. Sales of luxury homes, those priced at Rs 4 crore and above, which had gone into a freeze during and after the pandemic, more than doubled to 9,700 units in the first nine months of 2023, property consultant CBRE said.
These trends show people not only have the money, they also want to spend it. The overall macroeconomic indicators are strong. India is likely to end the fiscal with an enviable GDP growth of over 7 per cent. Between 2000 and 2022, per capita income has soared from $450 to $2,389. However, the anticipated trickle-down is weak, and there has been an alarming growth of income and wealth disparity in the country.
NGOs such as Oxfam have been pitching this; but more recently in November, UNDP’s Asia-Pacific Development Report again underlined the problem. One estimate says the top tenth of the population cornered 57 percent of the national income in 2021 while the bottom half had a mere 13 percent—one of the most unequal income distributions.
Growth of wealth is one way of measuring a nation’s progress; but equally important is whether it can achieve distributive justice. Perhaps taxation is one tool the government will have to look at afresh to ensure a better trickle-down.