Indian government does not publish any authentic data about various economic-social parameters from which the common citizens can get a proper idea about the objective reality of the country. So, it is needed to fall back upon statistics provided by non-government sources which are believed to be reliable. Oxfam India is one such institution that conducts studies based on scientific methodology. In its latest report titled Survival of the Richest: The India Story-The India Supplement 2023, the Oxfam India has revealed how the economic policies of Modi government are designed to benefit the super-rich at the expense of the majority of Indians, particularly the working-class and other toiling masses including the downtrodden. It cited the ‘World Inequality Report, 2022’, which stated that there are 228.9 million poor people (22 crores) in India, the highest number in the world. Inequality in India is growing menacingly. The poor in India live amidst despair and vulnerability to rising food and energy prices. They bear a higher financial burden during inflation, resulting in a polarized society where the rich keep getting richer and the poor poorer. The Economic Advisory Council’s State of Inequality in India Report confirmed growing inequalities and the impact on vulnerable communities, such as the Scheduled Tribes. This wealth inequality leaves 70% of Indians without a healthy, consumable diet. It means 1.7 million (17 lakhs) people die each year due to malnutrition. The median wage in the country is barely enough to provide for basic sustenance and losing a week’s wage could push people to the brink of starvation.
Anti-people, pro-rich economic and fiscal policies
The Report highlighted that during pandemic the bottom 50% of the population lost considerable wealth while the top 10% amassed over 72% of the total wealth. The number of billionaires in India rose from 102 in 2020 to 166 in 2022, and the combined wealth of India’s 100 richest persons reached Rs 54.12 lakh crore—an increase by 32.8%. At the other end, the poorest continue to suffer from poor diets, debt, and untimely deaths. 70% of Indians lack access to healthy, consumable food.
In 2019, the Indian government reduced corporate tax rates to forgo revenue of Rs 1.84 lakh crore and corporate tax collections declined by about 16%. The report also highlighted that in 2020-21, the government provided over Rs 1.03 lakh crore in incentives and tax exemptions to corporates, again putting corporate interests over those of the common people.
GST-Taxing the poor to benefit the rich
The BJP government in order to make up for the gap in revenue caused by corporate tax cuts, adopted a policy of increasing the Goods and Services Tax (GST) and excise duties on diesel and petrol. The excise duties on petrol and diesel increased by 194% and 512% respectively between 2014-15 and 2021-22. These taxes are regressive and burden most the marginalized sections of society. While income tax is based on income, an indirect tax like GST is borne by all, regardless of income, which means individuals with lower incomes end up paying more as a percentage of their income. The bottom 50% of the population pays 6 times more on indirect taxation compared to the top 10%, and a little less than two-thirds of total GST is coming from the bottom 50%. Thus, the main purpose of the new GST regime was to reduce the tax burden on corporations and extract more taxes from the common masses by widening the indirect tax net. The corporates reported record profits in 2021-22, while 84% of households saw a vertical dip in their income. The implementation of GST has only benefited the rich while burdening the poor more and more.
GDP growth does not mean economic prosperity of all
The extreme concentration of wealth at the hands of the few richest in India has come at the cost of the majority of the people. Economic growth in India between 2004 and 2019 mostly benefited the top 10%, reflecting increasing wealth inequality. The Report exposes the myth that GDP growth automatically improves the condition of the larger population. Times without number, our Party has explained that GDP growth figure does not reflect the distribution pattern of the wealth produced. similarly, increase in per capita income also is no indicator of general economic health of the toiling millions as it is a statistical average and hence skewing wealth in favour of a few coupled with simultaneous pauperization of the larger population is not reflected in per capita income.
Inflation hits the poorest the hardest
Inflation apparently impact all social classes adversely, but, significantly, Oxfam report showed that it has a more severe impact on lower-income households who are compelled to spend a larger proportion of their budget on goods and services. The poorest sections of society are, therefore, more vulnerable to the impact of inflation and face the prospect of deepening inequalities and reduced life choices and chances. In India, a 1% increase in food inflation could lead to undernourishment and an increase in infant and child mortality rates.
Inflation is shown to have a greater impact on the poor in India, with the lowest income quartile spending more than 53% of their earnings on food, compared to less than 12% for the wealthiest quartile. As a result, they are forced to reduce expenditure on other essential needs such as health, education, clothing, and shelter. Despite government claims of taking steps to reduce inflation, food inflation in India touched 6.52% in January 2023 and is still high. Food inflation is higher than non-food inflation, which puts a financial burden on vulnerable communities, pushing them further into poverty.
The Oxfam Report said that the Reserve Bank of India’s monetary policy, which targets inflation by increasing the repo rate (the rate of interest charged by the RBI on the cash borrowed from it by commercial banks) is faulty. Despite raising the repo rate five times by a total of 2.25 % from 4% to 6.25% between May and December 2022, inflation has consistently exceeded the 6% statutory limit set by the RBI. This shows that inflation is not going up because of increasing demand but due to other reasons like price manipulations, black marketing, hoarding and stock market speculation over prices of essential commodities. Supply is constrained because of these factors. It is relevant to note that this policy of containing inflation by hike in bank rates is also entailing rise in borrowing cost and entailing fall in demand for bank credit. This is the insurmountable crisis of capitalism. By trying to manage one end, its other end is becoming unmanageable.
Proposed panacea to people’s problems-taxing the super-rich
In venturing to offer a viable solution to the problems faced by the economically weaker and marginalised sections of society, the Report suggests progressive taxation of the super-rich. It begins by expressing concern about the lower government expenditure on health in India. It shows that the life expectancy of the poorest fifth of households is lower than that of the richest fifth.
The National Family Health Survey 5 has confirmed that 33 lakh children in India are malnourished, including 17.7 lakh severely malnourished. The government’s flagship scheme to combat malnutrition, the Mid-Day Meal Scheme (now known as POSHAN Abhiyan), has seen a 38% reduction in allocation since 2014 after factoring in inflation, and lacks funding. The Report opines that taxing the wealthiest 100 Indian billionaires at 2% would cover the cost of running this scheme for nearly 3.5 years.
It then moved on to the poor state of public health infrastructure in India, with low numbers of hospital beds and doctors, particularly in rural areas. High out-of-pocket expenses for healthcare is a reason why many Indians are falling into poverty every year. It recommended increasing public (government) spending on healthcare and suggested progressive taxation of the super-rich, including a wealth tax on billionaires, to fund healthcare programmes.
Then Oxfam report talked about a decline in budgetary allocation for children’s education, an increase in the dropout rate of marginalized children, and a lack of access to secondary education. More than half of the children aged 14-17 are unable to access secondary education, and government expenditure on secondary education has remained stagnant at 1 percent of GDP. Taxing the top 100 Indian billionaires at 2.5 per cent or the top 10 Indian billionaires at 5 per cent would almost cover the entire cost required to bring children back to school. It spotlighted the shortage of teaching staff in Indian schools, with 19% or 11.16 lakh posts lying vacant, mostly in rural areas. To fill these vacancies and meet the expenses for 13 years, it suggested taxing the top 100 Indian billionaires at 1% to fund filling up the vacancies for 26 years.
It also showed that it is a fact that the education ministry’s requested funds for ‘Samagra Shiksha’ were not met in 2022-23. It again proposed that the shortfall can be covered for 1.3 years by taxing the top 10 billionaires at 1%.
The hard truth that is capitalism
Towards the end, almost as an afterthought, the Report took a moment to wonder whether the government is capable of implementing its well-intentioned prescripts. The point is not whether the government is capable but whether the government is willing. It would be tantamount to indulge in a utopian fantasy to expect the BJP government at the Centre, which bends over backwards to represent and serve the ruling monopolists and multi-nationals, to even lend its ear to the idea of prioritising taxing the super-rich to fund health, education and other necessary social expenditures. The raison d’etre of capitalism, especially today in its final days, has always been to squeeze the exploited, the poor and have-nots more and more to fatten the purse of the rich, the haves and the exploiters. Without apologies, without a twinge of conscience.
The 99% which is carrying the 1% on its back for so long are to wake up, realise that together, withstanding and resisting all attempts to keep them apart on pretexts of religion, region, caste, language and gender, they are to boldly stand up straight and tall, and overthrow the oppressive 1%, and establish socialism to abolish exploitation of man by man. History has in its record what socialism can deliver. If socialism is established fulfilling all necessary conditions, both subjective and objective, here would no more be a need for Oxfam reports or for charitable hand-outs, that would only keep them languishing in bondage in body, mind, and spirit. Ruthlessly oppressive, utterly corrupt and out and out reactionary capitalism cannot be allowed to survive!
