 "The super rich were the first to bail during the financial crisis")
Indicating signs of a rise in income inequality, India’s richest one per cent now hold 58 per cent of the country’s wealth. The figure is higher than its global equivalent of about 50 per cent, according to a study released by rights group Oxfam, ahead of the World Economic Forum (WEF) annual meeting here.
The study showed that only 57 billionaires in the country have the same wealth ($216 billion) as that of the bottom 70 per cent population. Globally, just eight billionaires have the same wealth as the poorest 50 per cent of the world.
The study said there are 84 billionaires in India with a collective wealth of $248 billion. The list is led by Reliance Industries’ Chairman and Managing Director Mukesh Ambani ($19.3 billion), Sun Pharma Managing Director Dilip Shanghvi ($16.7 billion) and Wipro’s Azim Premji ($15 billion).
The total wealth in the country stood at $3.1 trillion. The total global wealth was $255.7 trillion, of which about $6.5 trillion was held by billionaires led by Bill Gates ($75 billion), Amancio Ortega ($67 billion) and Warren Buffett ($60.8 billion). In the report titled ‘An economy for the 99 per cent’, Oxfam said it is time to build a human economy that benefits everyone, not just the privileged few.
It said that since 2015, the richest one per cent has owned more wealth than the rest of the planet.
“Over the next 20 years, 500 people will hand over $2.1 trillion to their heirs — a sum larger than gross domestic product (GDP) of India, a country of 1.3 billion people,” it said.
The study showed the poorest half of the world has less wealth than what had been previously thought. Meanwhile, in the past two decades, the richest 10 per cent of the population in China, Indonesia, Laos, India, Bangladesh and Sri Lanka have seen their share of income increase by over 15 per cent.
On the other hand, the poorest 10 per cent have seen their share of income fall by almost 15 per cent.
“Due to a combination of discrimination and working in low-pay sectors, women’s wages across Asia are between 70 per cent and 90 per cent of the men’s,” it added.
Referring to the Global Wage Report 2016-17 of the International Labour Organization (ILO), the study said India suffers from a huge gender pay gap and has one of the worst levels of gender wage disparity — men earning more than women in similar jobs — with the gap exceeding 30 per cent.
In India, women form 60 per cent of the lowest-paid wage labour but only 15 per cent of the highest wage earners.
This means women are not only poorly represented in the top bracket of wage earners but also experience wide gender pay gap at the bottom.
It also said that more than 40 per cent of the 400 million women who live in rural India are involved in agriculture and related activities. However, as they are not recognised as farmers and do not own land. They have limited access to government schemes and credit, restricting their agricultural productivity. Singapore and India have a high number of multi-generational billionaires. Globally, a huge population, including India, would transfer wealth to their heirs in the next 20 years, the study said, while pushing for a need to establish a system of inheritance tax. It also referred to the routinely use of forced girl labour in the world’s largest garment firms that have been linked to cotton-spinning mills in India.
“There is evidence against cotton-spinning mills of India, which feed into the world’s largest garment companies, using forced labour. As per ILO, there are 5.8 million child labourers in India,” it added.
In many parts of the world, corporations are increasingly driven by a single goal — to maximise returns to their shareholders. In the UK, 10 per cent of profits were returned to shareholders in 1970. The figure now stands at 70 per cent.
“In India, the figure is lower, but is growing rapidly, and for many corporations, it is now higher than 50 per cent. As profits have been rising for the 100 largest listed corporations, the share of net profits going to dividends has also increased steadily over the past decade, reaching 34 per cent in 2014-15. Around 12 private corporations pay more than 50 per cent of their profits as dividends,” Oxfam said.
It urged the Indian government to end the extreme concentration of wealth to end poverty, introduce inheritance tax and increase the wealth tax as its proportion in the total tax revenue is one of the lowest.
“The Indian government must crack down on tax dodging by corporates and rich individuals to end the era of tax havens.
It must generate funds to invest in health care and education and increase its public expenditure on health from one per cent of GDP to three per cent and on education, from three per cent of GDP to six per cent,” Oxfam said.
