Tax the Wealthy: Piketty's Call for India to Address Inequality

French economist Thomas Piketty urges India to tax its super-rich to mitigate inequality. At a Delhi event, he proposed taxing fortunes above 100 million rupees. The government's economic adviser disagreed, warning of potential outflows. India's Finance Minister expressed concerns about taxing inheritance, citing effects on the middle class.

French economist and author Thomas Piketty has urged India to actively tax its super-rich, emphasizing the need for the country to address its growing inequality. Speaking at an event in Delhi organized by the Research and Information System for Developing Countries and the Delhi School of Economics, Piketty advocated for a 2% wealth tax on individuals with assets exceeding 100 million rupees ($1.18 million) and a 33% inheritance tax on similar-valued properties.

Piketty cited a 2024 report he co-authored, published by the World Inequality Lab, noting that the top 1% of India's richest now hold a larger share of national income than their counterparts in the US and Brazil. In the 2022-23 period, this elite group controlled 22.6% of India's national income and 40.1% of the country's total wealth, underscoring the stark disparities within the economy.

India's chief economic adviser, V. Anantha Nageswaran, opposed Piketty's suggestions, highlighting risks of high tax rates prompting capital outflows. The Indian government abolished its wealth tax in 2015, resisting further calls for its reinstatement or the implementation of an inheritance tax. Finance Minister Nirmala Sitharaman echoed similar concerns in April, emphasizing potential negative impacts on the middle class and their ability to pass on savings. Notably, the wealth of India's 100 billionaires surged by over $300 billion recently, reaching $1.1 trillion.

(With inputs from agencies.)