Thomas Piketty, a French economist known for his best-selling book “Capital in the 21st Century,” has called on India to take stronger measures to tax its super-rich, citing the country’s growing inequality. Speaking at a gathering hosted by the Delhi School of Economics and the think tank Research and Information System for Developing Countries (RIS), Piketty emphasized the importance of India fulfilling its commitment, made earlier this year by the Group of 20 (G20) finance ministers, to collaborate globally in taxing the wealthiest individuals.
Piketty, who co-authored a 2024 report released by the World Inequality Lab, noted that the wealthiest 1% of Indians now control a larger share of the country’s national income than their counterparts in the US and Brazil. According to his data, the richest 1% of Indians owned 40.1% of the country’s total wealth in 2022–2023, and controlled 22.6% of its national GDP.
During his address, Piketty suggested that India could increase its annual income by 2.73% of its GDP by implementing a 2% wealth tax on individuals with assets above 100 million rupees (approximately $1.18 million), as well as a 33% inheritance tax on properties worth the same amount. These measures, he argued, would not only address the wealth disparity but also contribute significantly to India’s economic growth.
However, Piketty’s proposal was met with opposition from the Indian government. V. Anantha Nageswaran, India’s Chief Economic Adviser, voiced concerns about the potential negative impact on the economy, particularly the possibility of increased wealth outflows. India’s finance minister, Nirmala Sitharaman, has also previously expressed reservations about the reinstatement of an inheritance tax, stating that it could hurt the “middle and aspirational classes” by limiting their ability to pass down modest land holdings or savings.
In 2015, India abolished its wealth tax, and since then, there has been no serious attempt to reintroduce it or impose an inheritance tax. The growing fortunes of India’s richest, highlighted in Forbes’ recent list of the country’s 100 wealthiest individuals, have fueled debate. These billionaires have collectively seen their combined wealth surge by over $300 billion, reaching a total of $1.1 trillion due to a booming stock market. This trend has only intensified calls for more equitable taxation, with critics arguing that the wealthiest individuals should contribute more toward addressing the country’s economic disparities.
The debate over taxing the rich in India highlights the broader global conversation about wealth inequality and the role of taxation in mitigating economic disparities. While the Indian government remains cautious about reintroducing wealth and inheritance taxes, experts like Piketty continue to advocate for more progressive tax policies that could help reduce inequality and boost the country’s long-term economic health.
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