India abolished wealth tax in 2015 because of a higher cost and lower yield.
The richest one percent of India’s population owns over 40 percent of the country’s wealth while the poorest half has just 3 percent. Wealth inequality in India has only sharpened since the pandemic, and the number of billionaires rose from 102 in 2020 to 166 in 2022, according to an Oxfam report titled ‘survival of the richest’. This means “exceptionally poor diets, increase in debt and deaths” among India’s poor, according to the report.
To plug these gaps and to fund welfare schemes, the report suggests the revival of a wealth tax on the rich. Sample the scale: just three percent of wealth tax on Indian billionaires can fund the National Health Mission for five years. This is in stark contrast to the current situation where the bottom half contributes 64.30 percent of the total tax collection, the report claims. It also criticises the decision to trim corporate tax.
India abolished wealth tax in 2015 because of a higher cost and lower yield. But can it be reconsidered?