The world's 26 richest people now own the same wealth as the poorest half of the world comprising 3.8 billion people, according to the latest survey by Oxfam. The international rights group's annual study, 'Public Good or Private Wealth', also found that getting the world's richest 1% to pay a mere 0.5% extra tax on their wealth could raise more money than it would cost to educate all 262 million children that are out of school and provide life-saving healthcare to 3.3 million people.
The report, released today, ahead of the World Economic Forum (WEF) annual meeting at Davos, Switzerland, also contained some damning facts specific to India. For instance, 13.6 crore Indians, who make up the poorest 10% of the country, have continued to remain in debt for the past 15 years. Meanwhile, in 2018 alone, India's 119 billionaires saw their wealth mushrooming by Rs 2,200 crore a day on average.
According to Oxfam International Executive Director Winnie Byanyima, one of the key participants at the WEF summit, it is "morally outrageous" that a few wealthy individuals are amassing a growing share of India's wealth, while the poor are struggling to eat their next meal or pay for their child's medicines. "If this obscene inequality between the top 1 percent and the rest of India continues then it will lead to a complete collapse of the social and democratic structure of this country," she added.
Here are some more takeaways from the Oxfam report, which is based on the latest comprehensive data sources available publicly, including from the Credit Suisse Wealth Databook and the annual Forbes Billionaires List:
- While India's bottom half saw a mere 3% rise in wealth in 2018, the top 1% got richer by 39% and now hold over 51% of the country's wealth.
India added 18 new billionaires last year, taking the total number of billionaires to 119, and their collective wealth rose to $440.1 billion, up from $325.5 billion in 2017. This is the single largest annual increase since the 2008 global financial crisis. Between 2018 and 2022, India is estimated to produce 70 new dollar millionaires every day, Oxfam said.
- The country's top 10% of the population holds 77.4% of the total national wealth while the bottom 60%, the majority of the population, own merely 4.8% of it. Oxfam also revealed that the wealth of India's top 9 billionaires is equivalent to the wealth of the bottom half of the population.
- The combined revenue and capital expenditure of the Centre as well as the states for medical, public health, sanitation and water supply was pegged at Rs 2.08 lakh crore, which is less than the net worth of the country' richest man, Mukesh Ambani. The Chairman and Managing Director of Reliance Industries boasts a net worth of Rs 2.8 lakh crore.
- According to Oxfam, getting India's richest 1% to pay 0.5% extra tax on their wealth could raise enough money to increase the government spending on health by a whopping 50%. Meanwhile, children from poor Indian families are three times more likely to die before their first birthday than those born to affluent ones.
- Inequality, at home and abroad, also has a massive gender bias. The paid work that Indian women do bring them fewer earnings due to the existing wage gap and, therefore, households that rely primarily on female earners tend to be poorer, Oxfam said, referring to the country's gender pay gap at 34%. Moreover, since 2006, India has slipped 10 notches on the WEF's Global Gender Gap Index to 108th rank in 2018 - far below the global average, and is lagging behind China and Bangladesh.
- In India, the unpaid work done by women looking after their homes and children is worth 3.1% of the country's GDP. Globally, this amounts to a staggering $10 trillion a year, which is 43 times the annual turnover of the world's biggest company, Apple.
- Moreover, globally, women earn 23% less than men and the latter not only own 50% more of the total wealth but also control over 86% of corporations. In India, the billionaires' list contains just nine women. Billionaire fortunes globally increased by 12% or $900 billion last year - that's $2.5 billion a day - while the poorest half of humanity saw their wealth decline by 11%. The number of billionaires has almost doubled since the financial crisis, with a new billionaire created every two days between 2017 and 2018.
- Yet, wealthy individuals and corporations are paying lower rates of tax than they have in decades. In fact, the study claims that in some countries like Brazil and the UK, the richest 10% are paying a lower rate of tax than the poorest 10%. Then there's the rampant level of tax dodging by the super-rich and corporations. "The super-rich are hiding at least $7.6 trillion from the tax authorities, avoiding an estimated $200 billion in tax revenues," read the report, adding that multinational companies exploit loopholes in tax codes to avoid taxes, "costing developing countries an additional estimated $100 billion of lost corporate income tax".
- The orthodox economic view, that imposing more taxes on the rich will harm everybody by stunting economic growth, is now being challenged by several bodies. According to Oxfam, the failure to tax "rich people and corporations more fairly" is a "missed opportunity to reduce inequality".
- Public services and social protection play a very powerful role in reducing both inequality and poverty. The study cites evidence from more than 150 countries, rich and poor alike, spanning over three decades, proving that investment in health, education and social protection reduces the gap between rich and poor. That's where funds raised through effective and fairer taxation can make a big difference.
- Here's another vital reason to tackle inequality post haste. Oxfam has shown that the average carbon footprint of the richest 1% globally could be as much as 175 times higher than that of the bottom 10%. "To get us to a situation where everyone on earth is living on more than $5 a day with current levels of inequality would require the global economy to be 175 times bigger than it is today, which would destroy our planet. The only way we can beat poverty while saving our planet is to tackle inequality," said the report.
Sushmita Choudhury Agarwal with PTI inputs