Thomas Piketty Speaks on India's Economic Inequality

Economist Thomas Piketty, known for his studies on inequality, recently spoke at the Delhi School of Economics and think tank RIS, advocating for a 2% tax on the wealth of India's ultra-rich to address the country's high level of inequality, second only to South Africa.

Piketty argues that while India has made progress in reducing poverty, it could achieve even faster growth with less inequality. He highlights the extreme inequality levels in India, where the share of wealth going to the bottom 50%, top 10%, and top 1% is among the highest in the world.

Piketty's Solution: He suggests expanding the tax base and implementing a wealth tax on the super-rich, which could significantly boost revenue for public services like education and infrastructure. He also emphasizes the need for greater tax justice and a more active role for India in international discussions on billionaire taxation.

Challenges in Implementation: Piketty acknowledges the difficulty in taxing the wealthy, especially non-residents, but believes the Indian government has the capability to enforce such policies. He also discusses alternative measures like financial inclusion and universal basic income, though he notes these are not magic bullets and should complement high-quality public services.

Redistribution and Worker Involvement: Piketty suggests that wider public holding of family-owned businesses and greater worker involvement in company management could help reduce wealth concentration. He is skeptical of the trickle-down theory given the current levels of inequality in India.