The World Inequality Report 2022 authored by Lucas Chancel, Thomas Pikketty, Emmanuel Saez and Gabriel Zucman says India is now among the most unequal countries in the world. The bottom 50% of the population earn ₹53,610, while the top 10% earn more than 20 times that. The top 10% and top 1% of the population hold 57% and 22% of the national income, respectively, while the bottom 50% hold just 13%. India stands out as a poor and unequal country with an affluent elite. Inequality today is as great as it was at the peak of western imperialism in the early 20th century. The pandemic has exacerbated it. Nations have become richer but governments have become poor, says the report. The totality of wealth is in private hands. Global multimillionaires have captured a disproportionate share of global wealth growth over the past several decades.
The Finance Minister, Nirmala Sitharaman, will take the findings of the report while framing the Budget. The long-standing complaint about corporate houses abusing provisions for tax exemption and deductions was addressed in a unique way by Ms. Sitharaman when she brought in a twin system of tax rates for companies claiming deductions and not claiming deductions. Domestic companies are charged 25% when their turnover is less than ₹250 crore and 30% when their turnover is above ₹250 crore. Suitable surcharges are also levied. A glaring inequality arises in the case of partnership firms; they are taxed at 30%. The idea seems to be to encourage corporatisation of firms. But medium- and small-scale industries find it a pain to go through the legal processes of corporatisation. Promoters of companies devise novel ways to escape the rigour of taxation.
