18 Jan Oxfam : Survival of the richest
Oxfam Report: Survival of the richest
This article covers “Daily current affairs for UPSC “and the topic is ‘Oxfam international’s report on the Survival of the richest, which is in the news, it covers the Indian Economy” In GS-3, and “inclusive growth” In GS-2, and following content has relevance for UPSC.
For Prelims: Oxfam International, World economic forum Reports, Windfall Tax
For Mains: GS-2, GS-3, Inclusive growth, Issues of inequalities and the way forward
Why in news:
- According to the report of Oxfam on ‘Survival of the Richest’, India’s billionaires would be able to afford the required 40,423 crores for the country’s starving for the following three years if they were to pay a single 2% tax on their whole wealth. The richest 1% of Indians currently controls more than 40% of the nation’s overall wealth, while the poorest 50% of the population collectively own just 3% of the country’s wealth.
- Oxfam International released the India supplement of its annual inequality report at the Davos World Economic Forum Annual Meeting.
- The report states that taxing India’s ten-richest individuals at 5% could generate enough money to bring children back to school.
Major findings of the Oxfam report
- According to an Oxfam report on India, the marginalized communities of the nation, including the Dalits, Adivasis, Muslims, women, and workers in the informal sector, continue to endure hardships in a system that places a high priority on the survival of the wealthiest.
- In India, relative to the wealthy, the poor pay disproportionately higher taxes and spend more on necessities and services.
Gender Inequality according to Oxfam Report
- The research also brought attention to gender inequality in India, where women’s wages were just 63 paise for every rupee earned by men’s employees.
- The situation is significantly worse for Scheduled Castes and rural employees, who between 2018 and 2019 earned only 55% and 50% of what the privileged socioeconomic groups did.
Suggestions for Combating Inequality
- To enact net wealth taxes, property and land taxes, and inheritance taxes to lessen inequality and create income for social services.
- Oxfam International has demanded that food businesses that are making substantial profits as a result of the inflationary increase pay windfall taxes.
- This is based on the theory that these businesses have benefited from the increase in the price of food and other necessities and ought to pay their fair share to help combat poverty and inequality.
- To increase the budgetary spending on the health sector to 2.5% of GDP by 2025 as planned in the National Health Policy.
- To increase funding for education to the industry standard of 6% of GDP.
- Oxfam advocated for higher taxes on the wealthy to address these issues. These options included minimum hiking rates for the wealthiest taxpayers as well as one-time “solidarity” taxes.
- By taking this action, governments may be able to raise money for social initiatives that fight inequality and poverty.
- Both significant food merchants, such as supermarket and hypermarket chains, and energy businesses are now subject to Portugal’s windfall tax.
Impact the Pandemic Had on India’s Billionaires
- According to Oxfam, billionaires in India have seen a 121% increase in wealth, or Rs 3,608 crore a day in real terms, since the pandemic started in November 2022.
- On the other side, in 2021–22, the lower 50% of the population paid 64% of the entire Goods and Services Tax (GST) of Rs 14.83 lakh crore, while the top 10% paid only 3%. From 102 in 2020 to 166 in 2022, India had a total of 166 billionaires.
Information sources of Oxfam Report
- For information on wealth disparity and billionaire wealth in the nation, the report draws on data from several sources, including Forbes and Credit Suisse.
- ITosupport the claims stated throughout the paper, government sources including the National Sample Survey (NSS), the Union budget documents, and legislative questions have also been utilized
The Windfall Tax:
Windfall taxes are made to tax any income a business makes as a result of an unforeseeable, external event, such as the increase in energy prices brought on by the conflict in Ukraine and Russia. It first appeared in 2022.
These are gains that can’t be directly linked to something the company actively did, like an investment plan or a corporate development.
A windfall is described as an “unearned, unplanned boost in income via no additional effort or expense” by the Congressional Research Service (CRS) of the United States.
The windfall tax was implemented to limit the “phenomenal gains” achieved by some oil refiners that choose to export fuel to profit from rapidly rising world prices while reducing domestic supplies.
Global Scenario: In addition to India, several nations, including the UK, Italy, and Germany, have either implemented or are considering implementing a windfall profit tax on energy corporations’ above-average profits.
The way forward India can take to Address Wealth Inequality
- The marginalized countries, including Dalits, Adivasis, Muslims, women, and workers in the informal sector, continue to suffer in a system that ensures the survival of the wealthiest. That has to be targeted.
- The Union finance minister was urged by Oxfam India to enact windfall taxes and one-time solidarity wealth taxes to stop crisis profiteering.
- A permanent tax increase on the richest 1% was also sought, as well as a rise in capital gains taxes, which are now taxed at a lower rate than other types of income.
- Additionally, Oxfam recommended the implementation of net wealth taxes, inheritance taxes, property taxes, and taxes on land and property, while simultaneously increasing the budgetary allocation for the health sector to 2.5% of GDP by 2025, as outlined in the National Health Policy.
- Oxfam stated that it also wants to see public health systems strengthened and budgetary support for education increased to the international benchmark of 6% of GDP.
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