The return of India’s super rich: 

The return of India’s super rich: 

The trajectory of wealth concentration in the country, not just the levels of recently estimated inequality, is important.

Context:

• High economic disparity among Indians

What are the reasons for high economic disparities?

• A large informal labour force
• Turbulent capital markets
• Unequal access to education
• Employment and mobility of workforce

What were the reasons of wealth concentration in the past?

• Wealth concentration at the top is an entirely different concept that cumulates past prosperity and disparity through inheritance, income and monopoly rents.
• Example: Indian has been home to extreme poverty as well as richest people:
• In 1937, the nizam of Hyderabad was declared the world’s wealthiest person by Time magazine.
• His wealth was estimated to be equal to around 30% of India’s gross domestic product (GDP).

Why is the computing wealth inequality in India harder?

• The absence of similar tax-return data.
• Issues of under-reporting

What were the steps taken after independence to reduce wealth concentration?

• Old royal wealth was eliminated through the abolition of princely titles and annexation of private land into national wealth as part of Indian unification
• A combination of Nehruvian socialism
• Indira Gandhi’s nationalization
• Progressive tax policies

What is the current trend?

• The decline of income and wealth inequality between 1950-80; but no diffusion of prosperity
• Due to emergence of new markets, promotion of private capital, modern investment, and market reforms made few Indians  
• As India began to embrace the market, private capital adapted to more modern investments, and combined with market reforms, it made a select few enormously wealthy.These wealthy people are mainly leaders of the industries
• Old wealth came to be replaced by more dynamic and financially savvy industrial wealth.

What is necessary to bring equitable growth?

• India needs the effort to democratize economic resources to achieve equitable growth. Growth cannot be equitable if the superrich is able to accumulate wealth at even higher rates.