India Should Tax the Super-Rich: Thomas Piketty

By Manoj Kumar
NEW DELHI (Reuters) – India should do more to tax its super-rich given its high levels of inequality, French economist and author Thomas Piketty said on Friday.

The writer of the best-selling book Capital in the 21st Century called on India to follow through on a July pledge by finance ministers from the Group of 20 major economies to cooperate on effectively taxing the world's largest fortunes.

"India should be active in taxing the rich," Piketty said at an event organised by Delhi-based think tank Research and Information System for Developing Countries (RIS) and the Delhi School of Economics.

He suggested that India could raise annual revenue worth 2.73% of its gross domestic product by imposing a 2% wealth tax on individuals with assets exceeding 100 million rupees (~$1.18 million), alongside a 33% inheritance tax on property valued at the same threshold.

Piketty highlighted that the proportion of national income held by the top 1% of richest Indians has now surpassed that of their counterparts in the United States and Brazil, citing a 2024 report he co-authored, published by the World Inequality Lab. In 2022-23, he noted, the richest 1% controlled 22.6% of India's national income and 40.1% of the nation's total wealth.

During the same event, the Indian government's chief economic adviser, V. Anantha Nageswaran, opposed Piketty's recommendations, arguing that higher taxes could lead to increased economic overflow.

The Indian government abolished a wealth tax in 2015 and has since rejected calls for its reinstitution or for an inheritance tax. In April, Indian Finance Minister Nirmala Sitharaman stated that an inheritance tax could adversely affect the "middle and aspirational classes," making it challenging for them to pass on savings or small land holdings to their children. Currently, India does not levy an inheritance tax.

According to the Forbes list of the richest Indians published this month, the cumulative wealth of India's 100 billionaires increased by over $300 billion to $1.1 trillion over the past year, fueled by a stock market boom.

(Currency: $1 = 84.7760 Indian rupees)