A new report on the income of Indian households in 2021 is making waves as the findings are surprising, rather humiliating, enough and contesting the claims made by many authorities who portrayed the picture of the flourishing income scenario in India.
According to Oxfam, the income of 84% of Indian households declined in 2021. Interestingly, the number of billionaires in India went up to 142 in 2021 from 102 in 2020.
The figures are a clear indication of the worsening income divide between poor and rich in India, and few of us could blame it on the Covid pandemic.
Oxfam’s report “Inequality Kills” was released Sunday ahead of the World Economic Forum’s Davos Agenda. It also revealed that India’s healthcare budget was decreased 10% from RE (revised estimations) for 2020-21 despite a roaring demand of strengthening the state of healthcare facilities in the country. Healthcare, however, wasn’t the only sector that disappointed. According to the Oxfam report, there was a 6% reduction in education allocations, while social security budget allocations fell to 0.6% of the total union budget from 1.5% a year ago.
According to the India supplement to the global report, India’s 100 richest individuals have collectively amassed wealth amounting to Rs 57.3 lakh crore (USD 775 billion) in 2021. What’s more disappointed was the state of poorest in India as the report states that the poorest 50 percent of Indians account for just 6% of the national wealth.
While the poor and middle suffered the most as they struggled to survive in an unprecedented situation during the pandemic, the wealth of Indian billionaires soared to new heights. The collective wealth of Indian billionaires skyrocketed from Rs 23.14 lakh crore (USD 313 billion) to Rs 53.16 lakh crore (USD 719 billion), giving a tight slap on the faces of those who claimed and believed that a lot more is done for those who fall below the poverty line and are now enjoying better living conditions.
According to the United Nations, more than 4.6 crore Indians are now in extreme poverty, and India is the home for nearly half of the global new-poor.
On the other hand, according to the report, India is home to the third-highest number of billionaires worldwide, just behind China, the United States, and Japan. There are more billionaires than France and Switzerland, which means that the number of billionaires in India increased by 39% in 2021 alone, the fastest growth rate as compared to any other country.
Taking a jibe at peculiar growth, the report states, “this surge came at a moment when India’s unemployment rate was as much as 15% in urban areas and healthcare was on the verge of collapse.”
Oxfam pointed out that nearly one-fifth of the rise in wealth among the richest 100 families could be attributed to the fortunes and businesses of just one individual – the Adanis.
“Gautam Adani, ranked 24th globally and second in India, witnessed his net worth multiply by eight times in a span of one year; from USD 8.9 billion in 2020 to USD 50.5 billion in 2021. According to the real time data by Forbes, as of 24 November 2021, Adani’s net worth stands at USD 82.2 billion. This tremendous growth in a span of eight months, during India’s deadly second wave, also includes returns from Adani’s newly bought Carmichael mines in Australia, and a 74 per cent acquired stake in the Mumbai airport. At the same time, Mukesh Ambani’s net worth doubled in 2021 to USD 85.5 billion from USD 36.8 billion in 2020,’’ the report states.
Amitabh Behar, Oxfam India CEO, makes it more humiliating for the authorities by highlighting the “stark reality” of inequality contributing to the deaths of at least 21,000 people every day or one person every four seconds.
“The pandemic has set gender parity back from 99 years to now 135 years. Women collectively lost Rs 59.11 lakh crore (USD 800 billion) in earnings in 2020, with 1.3 crore fewer women in work now than in 2019. It has never been so important to start righting the wrongs of this obscene inequality by targeting extreme wealth through taxation and getting that money back into the real economy to save lives,” Behar said.
Indirect taxes have increased as a percentage of Union government revenue over the last four years. However, Oxfam India’s briefing points out that the share of corporate tax in this proportion was decreasing. In the first six months 2020-21, the fuel tax increased by 33 percent compared to last year. This was 79% more than the pre-Covid levels. It also states that the wealth tax “for super-rich” was repealed in 2016.
To attract investment, India reduced corporate taxes from 30% to 22% last year. However, in absence of the proper planning and execution, the move didn’t bear any fruit and led to a loss in revenue of Rs 1.5 lakh crore.
The National Sample Survey (NSS), 2017-18, shows that Out-of-Pocket Expenditure OOPE) in Private Hospitals is nearly six times that of public hospitals for Inpatient Care and two to three times that of public hospitals for Outpatient Care. This is despite the fact that India’s average OOPE is 62.67% against the global average of just 18.12%.
Emphasizing the need for immediate attention and upgrade, the report states that despite the country having a federal structure, the Centre remains the control of resources due to the revenue structure. However, when it comes to accountability, the management of the pandemic was left up to the states who were not equipped with the financial and human resources to manage it.
Undoubtedly, the Oxfam report exposes some hard-hitting facts that are unpleasant to the ears of authorities sitting at high places. It also ascertains the belief that despite being the largest democratic country, India is among those very few where the rich are getting richer, and the poor are getting poorer. How and when the table will turn – or will it ever be turned – is a trillion-dollar question!