“If Russia is an oligarchy, how long can we resist calling India one?”
In 2002 India had just five dollar billionaires in the Forbes list. The number swelled to 119 in the year 2018. A dollar billionaire is someone whose personal wealth is one billion dollars or more. At the present exchange rate, one billion US dollars would mean a personal wealth worth at least INR 7,112, 45,00,000 (Seven thousand, one hundred and twelve crore rupees).
Assets of the richest Indian, Mukesh Ambani, is estimated by Forbes to be 51.4 billion US dollars. But Mr Ambani, it is believed, is not the highest income tax payer. That is because he would be paying income tax on his annual salary of Rs 15 crore that he receives. But his income is a great deal more from dividend he receives from his investments, which would be coming to him after the companies pay taxes.
It came as no surprise, therefore, when an Oxfam Report this month calculated that the total wealth of just 61 wealthiest Indians in 2019 was more than the total Union Budget of Rs 24 lakh crore. The report said, “The wealth of Indian billionaires rose from $325.5 billion (Rs 22.73 trillion) in 2017 to $408 billion (Rs 28.97 trillion) in 2019.
In his book Billionaire Raj published in 2018, author and journalist James Crabtree had pointed out that in order to grow faster, a country needed healthier, more educated and better skilled workforce. But growing inequality keeps more and more people away from availing opportunities and improving their lives faster.
This is what he said in an interview then: “Whether you look at International Monetary Fund research or the work that Thomas Piketty has done, or the World Inequality Report, they all point in the same direction. Which is that India is one of the world’s most unequal countries—probably up there with South Africa or Brazil. It’s more unequal than the successful economies of East Asia and it’s at a very early stage of its development.”
“Inequality isn’t just about the billionaires, it’s about the fact that the top 10%, and particularly the top 1%, have done disproportionately well. The vast mass of everyone else, although in absolute terms they’re doing much better, in relative terms they’re doing much worse. That’s not how you build a successful country.”
What is also noteworthy is the steady exodus of dollar millionaires from India. The wealth of dollar millionaires is far more modest than the billionaires, with minimum assets of each of them pegged at just over seven crore Indian rupees. But it is estimated that in the last two decades, as many as 61,000 of these Indian millionaires have migrated abroad, 23,000 of them since 2014.
Experts point to loss in investment and taxes besides employment that these rich Indians would have generated, had they stayed back, they also point out that the exodus is not motivated by just better business environment.
While the Indian government is obsessed with the alleged influx of poor and low-skill migrants from neighbouring countries, the Indian millionaires are leaving the country because of concerns for women’s and children’s safety, quality of education and healthcare, pollution, transport and commuting bottlenecks as well. Complicated tax structures,
intrusive and intimidatory tax administration and delays in courts and corruption are also cited as reasons why those Indians, who can afford it, are choosing to settle abroad.
The political consequences of this growing inequality could also be disastrous, with the north much more dominant politically and in terms of population, but the south and the west of India doing economically better.