“22.6% of earnings”: why Thomas Piketty thinks India must tax its tremendous wealthy now

French economist Thomas Piketty has known as on India to tax the very wealthy, citing alarming ranges of inequality. Talking at an occasion organized by Delhi-based suppose tank RIS and the Delhi College of Economics, the writer of Capital within the twenty first Century urged India to observe via on the dedication made in July by G20 finance ministers to cooperate to tax the world’s largest fortunes.

“India ought to give attention to taxing the wealthy,” Piketty stated, proposing a 2% wealth tax on people with belongings above ₹100 million ($1.18 million) and a tax on inheritance of 33% on belongings exceeding the identical threshold. In keeping with its estimates, these measures may generate further income equal to 2.73% of India’s GDP per yr.

The focus of wealth amongst India’s richest has exceeded that of the richest international locations. Citing a 2024 World Inequality Lab report he co-authored, Piketty revealed that the richest 1% of India’s inhabitants controls 22.6% of nationwide earnings and 40.1% of the nation’s wealth, figures increased than in america and Brazil.

This focus has been fueled by hovering fortunes amongst India’s elite. Over the previous yr, the mixed wealth of India’s 100 billionaires has jumped by greater than $300 billion, to $1.1 trillion, largely because of a rally in inventory markets, in keeping with Forbes.

India abolished its wealth tax in 2015 and has resisted requires its reintroduction. Finance Minister Nirmala Sitharaman has come out in opposition to an inheritance tax, citing a possible burden on the center class. Chief Financial Advisor V. Anantha Nageswaran echoed the sentiment on the identical occasion, warning that increased taxes may result in capital outflows.

As debates over wealth inequality and taxation intensify, Piketty’s name highlights a rising pressure between addressing financial disparity and defending financial development.