Despite severe inequality in wealth distribution, the wealth tax to GDP ratio from 2007-8 to 2013-14 was less than 0.01%, including the minimal estate duty and gift tax.
Despite growing inequality, the richest are paying a falling share on income taxes. The share of total income taxes paid by the top 5 per cent in terms of income fell from 89.5 per cent in 2013-14 to 88 per cent in 2017-18. That of the top 1 per cent fell from 77.2 to 75 per cent over that short period.
Will the government launch its second term with a spending spree, especially on infrastructure, to boost a sluggish economy? Or will the finance minister remain committed to fiscal prudence and persist with the effort to reduce the fiscal deficit, or the excess of expenditures over revenues financed with borrowing to 3 per cent of GDP?
We discuss this in this episode of Money Matters with expert inputs from R Ramakumar, Professor of Economics, TISS, and Finance Minister of Kerala, Thomas Isaac.