A list put out by Forbes India says that
India has 69 dollar-billionaires. That gives the country a near 7% share of the
world’s billionaires (said to total 1,011), whereas its share of world GDP is
just 2%, and of global poverty an embarrassing 30%. So many billionaires in the
midst of a sea of poor people is, of course, a sign of inequality, and some call
the contrast an obscenity. Comparisons are made between the wealth of a few ($
300 billion for our 69 billionaires) and the country’s GDP ($ 1,500 billion this
year); but this is like comparing apples and (say) rivers, because the first is
stock and the second is flow. If one must make comparisons, they have to be
between the stock of wealth owned by the super-rich, and the stock of wealth
that the rest of the country owns. Looked at this way, it would seem that the
billionaires own barely 3% of the total assets in the country, or less.
If that seems like an outrageous claim, start with
the value of the 280 million head of cattle that Indians own. Assuming just
`10,000 per head (most cross-bred cows go for more than `20,000), the value is
about $ 60 billion. But that is small beer when compared to the bank deposits
that people have; the total is about $ 750 billion, and a good proportion of
that belongs to individuals. But even that is small beer when you come to the
value of land, of which India has 140 million arable hectares. At the
acquisition price that Karnataka now has, of a mid-range of `25 lakh per hectare
for single-crop land, the total land value could be something like $ 7,500
billion. Add to that the value of all the houses (at least 100 million ‘pucca’
homes), and you get another large figure. And don’t forget that the billionaires
own only a fraction of the value of all listed companies (we don’t know about
the unlisted companies). Put all the numbers together, and it seems somewhat
obvious that the billionaires own only a tiny portion of the total wealth of the
country.
Still, the equality issue cannot be evaded. It used
to be said of Pakistan’s ‘22 families’ (actually about 43 families, before a
wave of nationalisations in the 1970s) that they owned nearly half of the
companies on the Karachi stock exchange. A quick study of India’s listed stock
suggests that the picture is not very different here, though you could argue
that there is greater depth. About 150 business families figure as owners among
the top 500 listed companies, and therefore have some prominence. But the top 20
own 32% of 1,800 listed companies, and the next 30 families own another 8%.
Ownership is, of course, only one of the issues.
You also have to look at market structures and, therefore, monopoly power, how
cleanly the money was made (a market economy needs entrepreneurs, after all, and
will anyone complain about N. R. Narayana Murthy becoming rich ?), whether much
of the wealth is inherited or self-created, and what connections there exist
between business and politics. You also have to look at tax issues, because the
argument is often made that India’s tax laws are kindest to the richest (no
long-term capital gains tax, no dividend tax on individuals though there is a
dividend distribution tax on companies, and so on). So, there is a fairness
agenda to be addressed, which is different from an equality agenda — and more
urgent.
