Question

Tax as a tool to remove income inequality in india

Answer 1

As of Nov 2016, India is the second-most unequal country in the world. [1] The richest 1% of Indians own 58.4% of wealth. The richest 10 % of the Indians own 80.7 % of the wealth. This trend is going in the upward direction every year, which means the rich are getting richer and the poor are getting poorer.[2]Inequality worsened since the establishment of income tax in 1922, overtaking the British Raj’s record of the share of the top 1% in national income, which was 20.7% in 1939–40.[3]

Income gaps Edit

According to Thomas Piketty, there is a "huge" gap in data about income tax in India.[4][5] Since the most of the population is out of income-tax database, most of the calculations (such as NSSO) is based on consumption-expenditure data instead of income data.[6] According to the World Bank, the Gini coefficient in India was 0.339 in 2009.[7] The Gini coefficient in India went up from 0.43 (1995–96) to 0.45 (2004–05).[8] According to the 2015 World Wealth Report, India had 198,000 high net worth individuals (annual income over $1 million) with a combined wealth of $785 billion.[9] In 2016, the International Monetary Fund in its regional economic outlook for Asia and Pacific said that India’s Gini coefficient rose to 0.51 in 2013 from 0.45 in 1990.[10]

Class divide Edit
Credit Suisse’s Global Wealth Databook for 2014 reports bottom 10 per cent of the Indian society owned merely 0.2 per cent of national wealth[11] while the richest 10 per cent have been getting steadily richer since 2000.