India wants its rich to give back.
A new survey of more than 3,200 people in 24 states finds that more than 80% of Indians support a “covid surcharge” on those earning more than Rs2 crore ($266,000) per year. An even larger share wants the government to impose a temporary tax on companies that raked in record profits during the pandemic, the survey by Fight Inequality Alliance India (FIA India) shows.
“The stark inequalities exacerbated by Covid-19 have started a global wave of protests to make the rich pay their fair share,” says Anjela Taneja, lead at Fight Inequality Alliance India. “The government of India can listen to the people and make provisions for social security, health, and well-being through the budget.”
Finance minister Nirmala Sitharaman will present the 2022-23 national budget on Feb. 1.
The pandemic created disparate worlds for India’s richest and poorest.
Between March 2020 and November 2021, the wealth of the Indian billionaire class increased from $334.97 billion to $719 billion. India’s richest man, Mukesh Ambani, kept getting richer and by October 2021 became the first Indian to amass a fortune exceeding $100 billion. Other business moguls like the Adani brothers more than tripled their wealth.
The irony of magnates and their companies minting money while workers were left grasping at straws during the initial lockdowns had citizens irked. The second wave of covid-19 only made matters worse as 10 million jobs were lost and 97% of households saw incomes drop.
Business, though, was better than usual. Ambani’s Reliance Industries added $9 billion to its market cap. Adani Group companies, which cover airports, roads, water management, data centers, solar manufacturing, defense and aerospace, edible oils and foods, mining, agriculture, and more, posted massive profits and grew market share. And just months into the pandemic, education tech firm Byju’s became a decacorn. E-commerce companies had a gala time as consumers shopped from home. Two of India’s largest vaccine producers—Serum Institute of India and Bharat Biotech—profited between 2,000% and 4000% on each dose sold to private hospitals.
Meanwhile, around 46 million Indians slid into extreme poverty in 2020, contributing to half of the new poor globally. More recent estimates suggest 150 million to 160 million people may have been forced below the poverty line.
An annual wealth tax—2% on wealth over $5 million, 3% on wealth over $50 million and 5% on wealth over $1 billion—would raise $78.3 billion a year, according to FIA’s estimates. A more progressive wealth tax could raise $122 billion.
The additional revenue could be a game-changer. Even at $78.3 billion, there would be enough funds to increase the government’s health budget by 271%, or eliminate households’ out-of-pocket health budget and leave some $30.5 billion left over, the nonprofit says.
Introducing a wealth tax even as a one-time solidarity measure will help the government deal with the current stagnation in the budgets for social welfare programs, experts told Quartz ahead of last year’s budget. Alternatively, India might consider a consumption tax for the ultra-rich.