Reducing inequality isn’t a ‘dangerous game’

Rather than misleading voters on another party’s manifesto, the ruling BJP must explain why inequality has risen during its rule

The Prime Minister calling a Congress manifesto promise to bring about a more ‘equal’ India a “dangerous game” and inducing fear among the middle class that the Congress would confiscate their properties, including mangalsutras, and give it all to Muslims if it was voted to power, is a duplicitous game being played by the ruling party to polarise voters. 

Given its ideological moorings, what the ruling party seems to be really saying is that ‘equality’ is undesirable and the wealth of the BJP’s billionaire cronies should not be touched through measures such as a wealth tax and inheritance tax. 

It is common knowledge that only the wealth of a small percentage, usually 1-2% of persons owning immense wealth and earning the highest levels of income in a country are brought under such taxes. Nowhere are common people deprived of their hard-earned, meagre incomes and assets and their mangalsutras!   

Contrary to the above “dangerous game” imagined by the Prime Minister, what the common people of this country do not seem to have realised is that it is in the other direction – from the poor to the rich – that wealth is flowing, thanks to the policies of the Modi government over the last 10 years – be it by way of write-offs of bank loans to the tune of Rs 25 lakh crore since 2014, as per a response by the RBI to an RTI request, or by way of revenues foregone through budgetary provisions, such as cutting corporate tax rates. Such revenues foregone through government munificence for corporates and the rich have exceeded Rs 13 lakh crore in the last 10 years. Such concessions to the rich amount to more than the budgets allocated for health, nutrition, education spending and the NREGS. 

It is clear that the ruling party has done little to curb the growing inequality in the country during its 10-year rule.  It has become necessary, therefore, to remind it of Article 38(2) of the Constitution, a Directive Principle of State Policy. Article 38(2) says, the State shall, “in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities….” Article 39(c) says that the State shall ensure that “operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.” Hence, there is no “dangerous game” being played if a party promises to implement these principles. 

But the opposite of these Directive Principles has shaped policies in the last 10 years leading to India becoming one of the most unequal countries in the world – 149th among 194 countries on equality. According to a paper released by the World Inequality Lab (WIL), in 2022-23, the “Billionaire Raj” headed by “India’s modern bourgeoisie” is now more unequal than during the colonial “British Raj”. The share of national income going to the top 10% rose to almost 60% in recent years, according to the paper. In contrast, the bottom 50% got only 15% of India’s national income in 2022-23.  

“Stagnating real wages, a decaying social security system, and lack of concern for informal workers” mark the BJP government’s 10-year tenure, according to economists Jean Drèze and Reetika Khera. Contrary to the promise to double farmers’ incomes, real wages for agricultural labourers declined by 1.3% on average every year from 2014-2024, as per data from the Ministry of Agriculture cited by them. While the monthly wages of the bottom 50% averaged Rs 5,930 per month, the average wages of the top 10% was 23 times that, i.e., Rs 1,12,748 as per the WIL paper. So much for “Sab ka Vikas”! There are 200 billionaires in the country now, as per the Forbes list, with their combined wealth amounting to between one-fifth and one-fourth of the country’s GDP.  

A levy of a ‘super tax’ of just 2% on the net wealth of just 167 of India’s wealthiest families would yield 0.5% of national income in revenues and “create space for public investments in health, education and nutrition” says the WIL paper. The budgets for all these departments have seen reductions as a proportion of GDP during the 10-year BJP rule.

It is not as though the idea of taxing the rich is new. An inheritance or estate tax, a wealth tax and gift tax were all in existence but they were abolished at various times. Abolishing these has probably led to the enormous growth in the wealth of the rich at the cost of the poor. Studies reveal that many countries have inheritance taxes, ranging from 18% to 60%. These have led to these countries building more egalitarian societies, with better public investments on basic needs. Calls to tax billionaires to build more equitable societies have been growing louder globally, with warnings that extreme inequality could lead to “political instability and violence”.  

Rather than endlessly indulging in attacking an opposition party for what it may or may not have done more than 10 years ago, creating communal divides, and misleading the public with twisted statements and dog whistles, it is time the ruling party answered what it has done in the last 10 years on the following issues: Explain why the unemployment rate in the country is so high; explain why the country has slipped between 2013 and 2023 -- from rank 55 to 111 in the Global Hunger Index, rank 78 to 116 in the Global Human Capital Index, rank 101 to 127 in the Gender Equality Index, rank 27 to 55 in the Global Democracy Index, rank 55 to 108 in the Electoral Democracy Index, rank 90 to 112 in the Human Freedom Index, rank 140 to 161 in the Press Freedom Index, and from rank 155 to the utmost bottom rank of 180 in the Environment Protection Index.  

Surely, the answers to these questions cannot be got by raising the Muslim bogey, or by blaming the Congress! 

(The writer is the Executive Trustee of CIVIC-Bangalore)