COVID-19: Activists and academics suggest 2% tax on richest 1% in a petition to PM Modi

This tax would help the government mop up about Rs 9.5 lakh crore, the petition by prominent academics, public intellectuals and activists says

COVID-19: Activists and academics suggest 2% tax on richest 1% in a petition to PM Modi

Rosamma Thomas

Prominent academics, public intellectuals and activists have come together to petition Prime Minister Narendra Modi to levy a 2% emergency corona wealth tax on the richest one per cent Indians to finance the effort to contain the virus and aid those suffering in the lockdown since March 25. PM Modi is set to address the nation at 8 pm tonight.

This tax would help the government mop up about Rs 9.5 lakh crore, the petition says. Ninety-five-year-old GG Parikh, who took part in the struggle for India’s freedom from the British, is among those to have taken a lead; former judge of the Bombay High Court, Justice BG Kolse Patil, leader of the Narmada Bachao Andolan Medha Patkar, member of the state legislature of Gujarat Jignesh Mewani, social activist Aruna Roy and retired Delhi University teacher Anil Sadgopal are among those who drafted the petition. Over 1000 signatures have been collected.

In 2018, international rights group Oxfam released a report showing that one per cent of India’s most wealthy had cornered 73 per cent of the nation’s wealth; projecting from 2019 reports of Credit Suisse and Oxfam, the petition estimates that the richest one per cent of the country now sits on wealth of Rs476 lakh crore.

The Narendra Modi government has announced Rs 1.7 lakh crore as aid for those affected by the lockdown to contain the novel coronavirus, which until now has claimed 2,290 lives in the country. The allocation is grossly inadequate, and the petition writers say the government must provide at least 1.5 per cent of GDP, about Rs 3.4 lakh crore, to reinvigorate India’s public health system alone.

Two-thirds of hospital beds in the country are now in the private sector, which also owns 80 per cent of the ventilators. However, while treatment is free at government hospitals, private hospitals have been shown to charge patients as much as Rs10 lakh for treatment of those critically ill after novel coronavirus infection. Given the steep charges, only 10 per cent of all cases are in private hospitals. Many government facilities have now been declared exclusively COVID-19 treatment centres, pushing patients with other conditions out.

One 68-year-old woman in Bhopal, Madhya Pradesh, under treatment for renal failure resulting from the Union Carbide gas leak tragedy of 1984, died after being denied treatment as her hospital was closed to all patients who were not suffering from COVID.

The lockdown has robbed people of work. Nearly 93 per cent of India’s workers are in the informal sector, with no security of employment and no health insurance or other social security. The lockdown has put paid to the work of daily wagers, and thousands were documented walking hundreds of km from urban centres to rural homes, unable to pay rent and having no means left to continue earning their daily bread. About 145 suicides were reported in the English language media since March 25, directly attributed to anxiety caused by the sudden lockdown. Many others died of exhaustion, walking long distances home. Journalist Tanmoy Goswami, writing for The Correspondent, avers that suicide is not merely a mental health issue. “Broad-brushing all suicides as the product of mental illness is just society’s way of denying responsibility for deep, systemic stressors: inequality, discrimination and injustice.”

In their petition, the academics and activists ask the government to perform its duty under Article 21 of the Constitution and protect the life and personal liberty of citizens by providing rations to all in need of help. A minimum monthly cash support of at least Rs 4000 should be offered to all families that face food insecurity on account of the lockdown; such support to an estimated 20 crore families would cost about Rs2.4 lakh crore.

Given that those returning jobless from cities will stay on for some time in villages, there is need to extend the Mahatma Gandhi National Rural Employment Guarantee Scheme, the petition states. Data from Rajasthan, for instance, has shown that there are a larger number of applicants, many of them first-time applicants, for this scheme that allows 100 days of unskilled – mostly manual –work at a set minimum wage for all those who seek work in rural areas. The petitioners assert that the government will need to begin a similar scheme in smaller urban centres too, to mitigate joblessness and aid the over 25 per cent of the country that is now unemployed.

The petitioners state that Article 38 (2) of the Constitution provides for “minimizing the inequalities of income” and Article 39 c calls for an economic system that does not concentrate wealth. A tax on the richest Indians would thus be in keeping with the Constitution.

In the US too, there are signs already that the COVID-19 crisis will see even greater concentration of wealth at the very top. A new report by think tank Institute for Policy Studies, Washington, warns that the “ultra-rich are getting ultra-richer”. Jeff Bezos of Amazon now has a net worth that is larger than the GDP of the state of Arkansas. The 614 billionaires in the US together hold $2.94 trillion. The top three of these – Bezos, Warren Buffet and Bill Gates, together hold about half the wealth of the bottom 50 per cent of the US. “Between 1980 and 2018, the taxes paid by America’s billionaires, measured as a percentage of their net worth, decreased 79 per cent. By allowing their tax burden to plummet, policy makers let the nation’s net worth concentrate obscenely at America’s economic summit,” the IPS study says, recommending greater tax burden for the super-rich in the US.

Economist Thomas Piketty, in a recent interview from his home in France, said, “In the rest of the world, in India or in West Africa, for instance, I’m very concerned. There, the way the lockdown has been designed is that in practice it’s mostly a way to get rid of the migrants and rural population working in the cities, who are just pushed out. In some cases, it led to huge mass movement of population going back to the countryside, which doesn’t seem to be the best way to avoid the spread of the virus. When you don’t have a proper safety-net system, income system, the violence of inequality is very clear.”

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Published: 12 May 2020, 7:12 PM