Context: The COVID-19 pandemic has heightened economic inequalities across the world says the Inequality Kills Report released by Oxfam International.
About the report 

• “Inequality Kills: The unparalleled action needed to combat unprecedented inequality in the wake of COVID-19” is a report released in January 2022 by Oxfam, a U.K.-based consortium.
• The report argues for sustained and immediate action to end the pandemic, address global inequality and initiate concerted measures to tackle the climate emergency.
• The central argument of the report is that inequality is a death sentence for people that are marginalized by social and economic structures and removed from political decision-making.

Key highlights of the report

Economic inequality has cut the income of 99% of the global population, and forced over 160 million more people into poverty.

• Hunger kills over 2.1 million people each year at a minimum.

Women, ethnic minorities and developing countries have been the hardest hit by growing inequality during the COVID-19 pandemic.

• Gander based violence was reported by the increasing intimate partner violence during the lockdown.

People dying in developing countries due to the pandemic is double when compared to people dying in the developed nations.

• The gap between the wealthiest and the poorest in society has grown during the pandemic
• Inequality contributes to the death of one person every 4 seconds.

Inequality is also at play in the climate crisis, with the world’s richest 1% emitting more than twice as much CO2 as the poorest 50% of the world.

• Despite the 2021 COP26 climate negotiations the leaders of rich countries are failing to prevent further planetary destruction.

Climate breakdown kills in a variety of ways: malnutrition, diseases, extreme heat, and more intense and frequent weather-related natural disasters.

Implications of inequality

• Crime and violence: The report identifies higher inequality with more crime and violence and less social trust.
• Impact on marginalized: The brunt of inequality and the violence is borne, for instance, by women across the world, Dalits in India, Black, Native American and Latin persons in the US and indigenous groups in many countries.
• Victimization of women: Pointing to the example of women, the problem runs a lot deeper as 13 million women have not returned to the workforce and 20 million girls are at risk of losing access to education.

Trends in India

• When 84 percent of households in the country suffered a decline in their income in a year marked by tremendous loss of life and livelihoods, the number of Indian billionaires grew from 102 to 142, Oxfam India’s latest briefing ‘Inequality Kills’ has revealed.
• The stark wealth inequality in India is a result of an economic system rigged in favour of the super-rich over the poor and marginalised.
• The briefing advocates a one percent surcharge on the richest 10 percent of the Indian population to fund inequality combating measures such as higher investments in school education, universal healthcare, and social security benefits like maternity leaves, paid leaves and pension for all Indians.
• India’s fight against inequality and poverty must be supported by the billionaires who made record profits in the country during the pandemic.”

Dependence on Indirect taxes

• Historically, India has always been dependent more on indirect taxes. In the year 2000 the percentage of indirect tax in the total tax revenue was at 63.69 percent. 
• Especially the tax levied on the sale and manufacture of goods and services that ordinary Indians depend upon.
• At the same time, the wealth tax for the super-rich has been abolished in 2016. Corporate taxes were lowered from 30 percent to 22 percent to attract investment last year has resulted in a loss of INR 1.5 lakh crore which has contributed to the increase in India’s fiscal deficit. 
• These trends show that the poor, marginalised and the middle class paid high taxes despite going through the raging pandemic while the rich made more money without paying their fair share.

DECADES OF UNDERFUNDING FOR PUBLIC SERVICES

• Apart from the failure of generating equitable revenue, Oxfam India’s briefing shows de-prioritization of education and health in the Union government budget when these two services were needed the most.

Measures that can be taken by the government to tackle the inequality issues:

• Tax the new wealth made since the start of the pandemic through permanent wealth and capital taxes.
• Invest the trillions that could be raised by these taxes in progressive spending on universal healthcare and social protection, climate change adaptation, and gender-based violence prevention and programming.
• Tackle sexist and racist laws that discriminate against women and racialized people, and create new gender-equal laws to uproot violence and discrimination.
• Define policies that will ensure women, racialized and other oppressed groups are represented in all decision-making spaces.
• End laws that undermine the rights of workers to unionize and strike, and set up stronger legal standards to protect them.
• Waive intellectual property rules over COVID-19 vaccine technologies to allow more countries to produce safe and effective vaccines to usher in the end of the pandemic.

Oxfam India believes the following measures should be implemented
Recognise inequality is real and agree to measure it. India needs to track policy impact better by improving mechanisms for its measurement. 

• There is an immediate requirement to start disaggregating more public statistics by income and introduce regular collection of data on income and wealth inequality, while ensuring that this data is made freely available in the public domain. 
• At least two surveys should be conducted over a ten-year period, using a reasonably comparable methodology capturing income and wealth inequalities.

Redistribute India’s wealth from the super-rich to generate resources for the majority: It is time for India to reintroduce a wealth tax to generate much-needed resources to fund the recovery from the pandemic. 

• Tax compliance by wealthy individuals must also be drastically improved, instead of imposing indirect taxes on India’s poor and middle class. 
• Evidence shows that the threat of an audit shows the most pronounced effect on compliance and can be complemented by shaming tax evaders or by the imposition of penalties and should take precedence over a reduction in direct tax rates which has ambiguous effects on compliance and adverse effects on revenue.

Generate revenue to invest in the education and health of future generations: A temporary ONE percent surcharge on the richest 10 percent population could help raise an additional INR 8.7 lakh crore, which could be utilised to increase the education and health budget. 

• The primary outcome of the pandemic must be a quality, publicly funded and publicly delivered healthcare system that works for all and not just the rich. 
• A secondary outcome should be an education system which addresses the needs of everyone, not just those privileged to attend elite private schools or have access to digital technology. 
• There is also an urgent need to improve medical infrastructure by implementing India’s patent rights charter (PRC), standardising diagnostic procedures, building rural clinics, and developing streamlined health IT systems in tandem with adopting a family-health approach, making greater investments in healthcare and training and paying frontline healthcare workers adequately.

Change the rules and shift the power in the economy and society: It is time to reverse social and economic policies that have contributed to the poor development outcomes for India’s marginalised communities. 

• It is time to reverse privatisation and commercialisation of public services, address jobless growth and bring back stronger social protection measures for India’s informal sector workers.

Enact and Enforce Statutory Social Security Provisions for Informal Sector Workers: While the government is recognising gig economy workers, it also needs to focus on laying the legal groundwork of basic social sector protections for 93 percent of India’s workforce.

Road Ahead

• All governments must invest in evidence-based and powerful policies to save lives and invest in our future. The legacy of the pandemic must be quality, publicly-funded, and publicly-delivered universal healthcare.