Should India take from the rich, give the poor? A new election flashpoint
As India enters the second half of its giant election, wealth distribution has emerged as a central campaign faultline — and a battering ram for PM Modi to target the opposition.
New Delhi, India — As the world’s largest — and one of its most unequal — democracies votes in a mammoth national election, a new debate has gripped the campaigns of both Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP) and the opposition Congress party.
At the heart of this latest political slugfest is the idea of a potential redistribution of wealth. But while the Congress party has alluded to the need for some resources to be reallocated to traditional marginalised economic and caste-based communities, Modi and the BJP have accused the opposition of plotting to hand over wealth from Hindu households to Muslims.
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So what’s the controversy about and what do economists say about the proposals for a relook at India’s wealth distribution?
What is the controversy about?
In April, Rahul Gandhi, a scion of the Nehru-Gandhi political dynasty, said if voted to office, his Congress party would conduct a caste census along with an economic and institutional survey to determine who owns what and earns how much. Following this, a portion of the 16 trillion rupees ($192bn) of benefits given to 22 big businessmen by the Modi government would be transferred to 90 percent of the country’s people, as a starting point for delivering social justice, he said.
Gandhi described the caste census as an “X-ray” into Indian society. “This is not a political issue for me, this is my life mission,” Gandhi said. “You can write down; no force can stop the caste census.’’
The Congress party manifesto doesn’t talk directly about redistribution of wealth. It says, “We will address the growing inequality of wealth and income through suitable changes in policies.’’ On the caste-based census, it says, “Congress will conduct a nation-wide Socio-Economic and Caste Census to enumerate the castes and sub-castes and their socio-economic conditions. Based on the data, we will strengthen the agenda for affirmative action.”
Yet, responding to Gandhi’s speech, Modi has been repeating in election rallies that the Congress party has hatched a “deep conspiracy’’ to snatch the wealth of people and gold of Hindu women to distribute it among Muslims, whom he described as “infiltrators” and “those who have more children”.
The opposition has accused Modi of resorting to “lies” and “hate speech” to distract people from high unemployment and rising prices, and has complained to the election commission.
Whose wealth and how much?
India is the fastest-growing major economy in the world, but also suffers from deepening inequality. Numerous studies have shown that the benefits of India’s brisk growth have been unevenly distributed.
A new study by researchers at the World Inequality Lab shows that income and wealth inequality in India today is, in many ways, worse than it was even under British colonial rule. India’s richest 1 percent control 22.6 percent of national income and more than 40 percent of the country’s wealth. Meanwhile, the bottom 50 percent control less than 10 percent of national wealth.
