World

Congress pressures Modi to increase taxes on billionaires

Wealth concentrated in the hands of the richest 1% of India's population is at its greatest level for six decades

REUTERS July 12, 2024

Rahul Gandhi (R) and Jairam Ramesh, senior leaders in India's opposition Congress party, during a media briefing at Congress headquarters in New Delhi, India, June 6, 2024.PHOTO: REUTERS

India's main opposition Congress party asked Prime Minister Narendra Modi on Friday to impose an additional tax on the country's billionaires to generate funds for stretched public services like education and health.

The annual budget will be presented by Finance Minister Nirmala Sitharaman on July 23 at a time of deepening income inequality and high unemployment despite India's world-beating economic growth of nearly 8% and booming stock markets.

Jairam Ramesh, senior Congress party leader, said in a post on X that a 2% tax on the wealth of India's estimated 167 billionaires could raise as much as 1.5 trillion rupees ($18 billion) or about 0.5% of gross domestic product.

"This could pay for schools, hospitals, renewable energy, and many more essential investments," he said, urging the government to tax the super-rich more.

Wealth concentrated in the hands of the richest 1% of India's population is at its greatest level for six decades and its percentage share of national income exceeds that of countries including Brazil and the United States, research group the World Inequality Lab, opens new tab reported earlier this year.

Opposition parties are pressing the government to take steps to increase spending on welfare programmes after Modi lost his majority in parliament and had to rely on coalition allies to return to office for the third time.

Government officials earlier ruled out the possibility of taxing the wealth of the ultra-rich, arguing it could encourage them to move to low-tax countries.

Congress also asked Modi to clarify what would be India's position at the G20 meeting in Brazil later this month on the issue of supporting a global tax on billionaires, a proposal pushed by Brazil, which holds the G20 presidency this year.

Brazil's proposal, crafted by French economist Gabriel Zucman from the independent EU Tax Observatory, calls for an annual 2% levy on fortunes exceeding $1 billion, which could raise up to $250 billion annually from about 3,000 individuals.