More than the world numbers, the wealth concentration in few individuals in India is alarming with merely 84 billionaires owning wealth worth $248 billion, led by Mukesh Ambani ($9.3 billion), Dilip Shanghvi ($16.7 billion) and Azim Premji ($15 billion) among others.
The glaring rich and poor divide is vivid from the corporate world. A top IT firm CEO in India earns 416 times higher the salary of a typical employee and the dividend outgo is not on par with the world average, Oxfam said. To bridge the gap, the non-profit London-based entity has advised the Indian government to introduce inheritance tax to end the inequality.
The report is timely at a time when corporates-owned media is pitching for reduced corporate taxes and more tax concessions willingly ignoring the rise in wealth inequality in the country. When other countries such as Japan and some in Europe have successfully implemented the Inheritance Tax, why not India?
On an average, every Indian parent leaves behind his entire wealth for his children, especially for men heirs and not women, despite laws, which ensure an equitable wealth inheritance among all the progeny. The report said women are disproportionately affected by inequality as out of 62 billionaries, 53 are men and just nine are women.
Winnie Byanyima, Oxfam International Executive Director, said: “It is simply unacceptable that the poorest half of the world’s population owns no more than a few dozen super-rich people who could fit onto one bus. World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action."
He said most of the corporates are finding ways to evade tax than being pro-active on wealth distribution. "The fact that 188 of 201 leading companies have a presence in at least one tax haven shows it is time to act," said Byanyima.
Globally, an estimated $7.6 trillion sits offshore and if the tax is paid on this income, an extra $190 billion would be available to governments every year. Asia, including India and African countries fall in this category, according to the report. Just $14 billion would be sufficient to pay for healthcare for mothers and children in Africa that could save 4 million children’s lives a year, and employ enough teachers to get every African child into school, said the report.
The report said 9 out of 10 WEF corporate partners have a presence in at least one tax haven, dodging taxes which may cost the developing countries at least $100 billion every year and the corporate investment in tax havens almost quadrupled between 2000 and 2014.
On positive side, the report said the number of people living in extreme poverty halved between 1990 and 2010, the average annual income of the poorest 10 percent has risen by less than $3-a-year in the past quarter of a century. Had inequality in wealth was curbed, an extra 200 million people would have escaped poverty, said the report.
Byanyima added: “The richest can no longer pretend their wealth benefits everyone – their extreme wealth in fact shows an ailing global economy. The recent explosion in the wealth of the super-rich has come at the expense of the majority and particularly the poorest people."