Renowned French economist Thomas Piketty has emphasized the need for India to implement higher taxes on its super-rich to reduce income inequality and fund social programs. Speaking at a recent event, Piketty highlighted that India’s wealth disparity has widened significantly, with the top 1% holding an outsized share of national wealth.
Piketty’s Call for Progressive Taxation
Piketty pointed out that India’s tax-to-GDP ratio remains low compared to other large economies, leaving limited fiscal space for public spending on health, education, and infrastructure. He advocated for increased wealth taxes, inheritance taxes, and higher income tax rates for the ultra-rich. “India has immense potential to mobilize resources from its wealthiest citizens to ensure equitable growth,” he stated.
Stark Wealth Disparity in India
According to recent studies, the richest 1% of India’s population owns nearly 40% of the country’s wealth, while the bottom 50% hold only 3%. Piketty argued that this gap underscores the urgency for reforms aimed at redistributing wealth through targeted taxation policies.
Source:- bbc news
Lessons from Global Practices
Drawing from his research and global examples, Piketty highlighted how countries like France and the Nordic nations use progressive tax systems to narrow income disparities and bolster public services. He suggested that India could adopt similar measures, while also strengthening tax compliance to minimize evasion.
Source:- news 18
Challenges Ahead
While Piketty’s recommendations resonate with economists advocating for fiscal equity, they face resistance from political and business leaders concerned about the impact on investments. Additionally, implementing such reforms requires robust administrative capacity and public support.
The Way Forward
India’s path to addressing inequality lies in balancing growth with equitable resource distribution. As Piketty asserts, taxing the super-rich could provide a critical boost to India’s social and economic development.
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