The Dual Challenge of Corruption and Wealth Disparities in India

0
272

By: Ayesha Khan   14 November 2023

India has been grappling with the pervasive issue of corruption for decades. Recent years have witnessed a concerning surge, particularly under the governance of the Bharatiya Janata Party (BJP). While the government’s “shining and progressing India” slogan aims to project a positive image, there is a need to delve deeper into the issue of corruption, recognizing its existence across various spheres of power.

In 2022, Transparency International’s Corruption Perceptions Index delivered a verdict that merits our attention. India’s ranking dropped to the 85th position, a decline from the 78th place it held in 2012. The prolonged rule of the BJP has raised questions about the concentration of power, potentially creating an environment conducive to collusion with criminals, as highlighted by the Indian Association for Democratic Reforms (ADR).

A noticeable surge in corruption cases investigated by the Central Bureau of Investigation (CBI) from 2012 to 2022 is a cause for concern. Cases such as the Jet Airways Bank Fraud investigation, the arrest of Delhi’s former Deputy Chief Minister for accepting bribes related to liquor licenses, and the Adani Group’s alleged involvement in stock market manipulation underscore the severity of the issue. These instances are not intended to single out any particular entity but to illustrate the broader challenge of corruption that the nation is confronting.

The Modi-Adani Corruption Nexus has become a focal point of concern, with suspicions surrounding the Adani Group’s involvement in fraud and tax evasion. Reports suggesting government protection raise questions about the independence of regulatory bodies. Simultaneously, investigations by the Securities and Exchange Board of India (SEBI) and the US Department of Justice intensify, emphasizing the need for a thorough and impartial examination to ensure fairness and justice prevail.

Disturbingly, out of the 385 sitting Members of Parliament from the BJP, 139 are entangled in criminal cases. Furthermore, 14 MPs possess assets exceeding 100 crores, exemplifying a concerning pol-criminal-corruption nexus in India. These figures raise concerns about the integrity of the political landscape and may contribute to eroding public trust in the democratic system.

External reports further underscore the gravity of the situation, with Oxfam’s 2023 report indicating that 40% of India’s wealth was controlled by just 1% of the population from 2012 to 2021. Additionally, India ranks 10th on the Crony Capitalism Index, with close-knit businesses accounting for 8% of the nation’s GDP, according to the latest findings. This concentration of wealth in the hands of a few fosters an environment where power and economic resources are disproportionately distributed, perpetuating inequality and hindering the nation’s overall progress.

The issue of corruption takes on a new dimension with Oxfam India’s latest report, “Survival of the Richest: The India Story.” The report unveils a stark reality: just five percent of Indians own more than 60 percent of the country’s wealth, while the bottom 50 percent possesses only three percent of wealth. The report highlights the significant increase in the wealth of India’s richest individuals, drawing attention to the fact that a one-off 20% tax on a billionaire’s unrealized gains from 2017–2021 could potentially raise INR 1.8 lakh crores.

The report’s revelations about the increase in the number of billionaires in India, from 102 in 2020 to 166 in 2022, add a troubling layer to the already complex issue of wealth distribution. The combined wealth of India’s 100 richest has touched $660 billion (INR 54.12 lakh crore), an amount that could fund the entire Union Budget for more than 18 months.

Amitabh Behar, CEO of Oxfam India, rightly points out the stark contrast between the flourishing fortunes of billionaires and the increasing hardship faced by the poor. The number of hungry Indians increased to 350 million in 2022 from 190 million in 2018, leading to 65 percent of deaths among children under the age of five, according to the Union Government’s submission to the Supreme Court.

While the rich amass unprecedented wealth, the poor continue to suffer. The report reveals that the wealth of the top 10 richest in India stands at INR 27.52 lakh crore, marking a 32.8 percent rise from 2021. This wealth could finance the Ministry of Health and Family Welfare and the Ministry of Ayush for more than 30 years or fund India’s Union education budget for 26 years.

The global context further amplifies these disparities, with the world’s richest 1% capturing almost two-thirds of all new wealth since 2020. Billionaire fortunes are increasing by $2.7 billion a day, while inflation outpaces the wages of at least 1.7 billion workers, more than the population of India.

India’s banking system demonstrates a class bias in dealing with loan recovery. While instances like the tragic incident in Jharkhand, where a pregnant woman was crushed under a tractor for not paying a INR 10,000 EMI, highlight the harsh reality faced by the poor, the RBI withdrawing curbs on third-party recovery agents raises concerns about the protection of vulnerable individuals. In contrast, loans written off by public banks reached INR 11.17 lakh crore, with only 13% of this massive amount being recovered.

The report draws attention to the global trend of governments reducing income tax rates on the richest over the last 40 years, exacerbating inequality. In India, the Central Government’s reduction of corporate tax slabs and the substantial revenue foregone in the form of incentives and tax exemptions for corporates raise questions about the fairness of the tax system. It is crucial to reevaluate these policies and ensure that they contribute to a more equitable distribution of resources.

The call from Oxfam India to the Union Finance Minister is clear and urgent. They advocate for the introduction of one-off solidarity wealth taxes and windfall taxes to end crisis profiteering, the permanent increase of taxes on the richest 1 percent, and the implementation of progressive tax measures such as wealth tax and inheritance tax. These measures are vital to addressing inequality, funding public services, and promoting a fair and just society.

The 2022 Corruption Perceptions Index (CPI) emphasizes the global struggle to combat corruption. With 155 countries making no significant progress against corruption or declining since 2012, it is evident that corruption remains a formidable challenge worldwide. The index reflects the interconnectedness of corruption, security threats, and global peace, highlighting the need for concerted efforts to address these issues collectively.

The writer is an independent analyst based out of Islamabad, Pakistan.