Economy & Equity

The report also pointed out that billionaires around the world have been paying a tax rate equivalent to less than 0.5% of their wealth. The G20 Finance Ministers meeting is expected to deliberate on a global deal to increase taxes on the super-rich, with Brazilian Finance Minister Fernando Haddad identifying the global tax on billionaires as a key deliverable at the summit. https://thewire.in/world/top-1-grow-wealth-by-42-trillion-in-past-decade-36-times-more-than-bottom-50-oxfam 5/07/2024

Despite the headline-grabbing figures of expenditure in this year’s Union budget, a closer look reveals a troubling reality for the nation’s poorest. https://thewire.in/rights/budget-2024-25-social-sector-spending-shrinks Major schemes and essential programmes that many marginalised communities rely on have seen a reduction in funding. This subtle yet significant shift threatens to undermine the support systems for those who need them most, raising concerns about the true impact of the proposed expenditure. In recent years, funding for key social sector heads has steadily dwindled as a percentage of the government’s total expenditure. Many allocations have either declined or remained stagnant, with any increases being merely marginal. The heads experiencing the most significant cuts compared to 2015-16 include food subsidy, social welfare, education, health, and fertilizer subsidy. For instance, the allocation for food subsidy has decreased from 7.79% in 2015-16 to just 4.26% in the 2024-25 Budget Estimates. Social welfare funding has dropped from 1.7% to 1.1%, Education, from 3.75% to 2.61%, health from 1.91% to 1.85%, and fertilizer subsidy from 4.04% to 3.4%. Meanwhile, pension allocations have remained stagnant at 5.05%. by Pranay Raj 25/07/2024

The Union budget attempted to fix supply-side factors once again without paying enough attention to firm up ways to bolster consumer demand. Instead, the whole budget exercise for this financial year seems to concentrate solely on reducing the targeted fiscal deficit from 5.1% (in the interim budget) to 4.9%, the maximum price for which will now be paid by taxpayers. Taxpayers in the bottom slabs have been given relief doles in income tax, all of which will be undercut by heavier taxations on their investments. The tax on short and long-term capital gains has now been increased, something that Sitharaman said would “simplify” the tax structure. swing traders in the share market, a majority of whom earn less than Rs 50,000 in a month, will now have to pay much more in taxes than earlier. In contrast, the budget has slashed corporate tax for foreign companies from the existing 40% to 35% to incentivise foreign investments. In any case, the Modi government over the last decade has waived off a large chunk of taxes even in the previous tax structure. https://thewire.in/economy/modi-policy-paralysis-budget Ajoy Ashirwad Mahaprashasta 23/Jul/2024

In a discussion with Subhoranjan Dasgupta, Professor Patnaik, a distinguished economist from JNU, explores the widening wealth disparity and how a focus on GDP can be used to legitimise transfers to crony capitalists. https://thewire.in/economy/hunger-undernutrition-stalking-india-placed-worse-than-least-developed-nations-prabhat-patnaik Which adjective would you use to pinpoint the nature and condition of the Indian economy – ‘baffling,’ ‘inexplicable,’ or purely ‘criminal’? While one side of the coin says that India is projected to become a $5 trillion economy and will soon emerge as the third-largest economy in the world, the other side emphasises that around 11% of the population is poor in India, according to World Bank data, and 189.2 million people still go to bed hungry every night. Subhoranjan Dasgupta 19/07/2024