Survival of the Richest Report: The India Story (2024)

• 17 Jan 2023
• 5 min read

Why in News?

According to the Oxfam’s Report “Survival of the Richest: The India story”, the richest 1% in India now own more than 40% of the country’s total wealth, while the bottom half of the population together share just 3% of wealth between 2012 and 2021.

• Oxfam International released the India supplement of its annual inequality report on the first day of the World Economic Forum Annual Meeting at Davos.
• The report states that taxing India's ten-richest individuals at 5% could generate enough money to bring children back to school.

What are the Findings of the Report?

• Gender Inequality:
  • The report also highlighted gender inequality in India, stating that female workers earned only 63 paise for every 1 rupee earned by male workers.
  • The situation is even worse for Scheduled Castes and rural workers, as they earned 55% and half of what the advantaged social groups earned respectively, between 2018 and 2019.
• Social Inequality:
  • Oxfam India stated that the country's marginalized communities such as Dalits, Adivasis, Muslims, Women, and informal sector workers are continuing to suffer in a system that prioritizes the survival of the richest.
  • The poor in India are paying disproportionately higher taxes, and spending more on essential items and services when compared to the rich.
• Suggested Measures to Combat Inequality:
  • To implement inheritance, property and land taxes, as well as net wealth taxes, in order to reduce inequality and generate revenue for social programs.
  • To enhance the budgetary allocation of the health sector to 2.5% of GDP by 2025, as envisaged in the National Health Policy.
  • To enhance the budgetary allocation for education to the global benchmark of 6% of GDP.
  • To combat these problems, Oxfam urged higher taxes on the rich, through a combination of measures including one-time “solidarity” taxes and raising minimum rates for the wealthiest.
  • Oxfam International has called for food companies that are making large profits as inflation has surged to face windfall taxes.
    • The idea behind this is that these companies have benefited from the rising prices of food and other essentials and should contribute a fair share to help address poverty and inequality.
    • This measure could generate revenue for governments to support social programs that help reduce poverty and inequality.
    • Portugal introduced a windfall tax on both energy companies and major food retailers, including supermarket and hypermarket chains.
• Sources for Data:
  • The report is based on data from multiple sources, including Forbes and Credit Suisse for information on wealth inequality and billionaire wealth in the country.
  • Additionally, government sources like the National Sample Survey (NSS), Union budget documents, and parliamentary questions have been used to corroborate the arguments made throughout the report.

What is the Windfall Tax?

• Windfall taxes are taxes imposed on unexpected or extraordinary profits, such as those made during times of economic crisis, war, or natural disasters.
• Governments typically levy a one-off tax retrospectively over and above the normal rates of tax on such profits, called windfall tax.
• One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.

Source: TH