No. 5 Vol. XLIV                                    Not To Be Published Before 8 New New Delhi, 8 January 2025

Open Forum

India’s Billionaires Flourish

COMMON MAN YEARNS ATTENTION

By Dhurjati Mukherjee 

Amid growing concern over the New Year somewhat being difficult with inflation affecting the common man, subdued investment and disturbing global geo-political situation, the wealth of Indian billionaires surged 42 per cent to over $905 billion during the last financial year, positioning it as the third largest base behind the US and China. A report by Swiss Bank UBS stated that the number of such billionaires more than doubled to 185 in the last decade and their combined wealth rose a whopping 283 per cent. Can this be attributed to the pro-rich economic policies favouring the business class by the Modi government, as repeatedly alleged by Opposition Congress? 

Remember, former Prime Minister Late Dr Manmohan Singh had cautioned that the gap in rising income and wealth inequalities, “if not matched by a corresponding rise of incomes across nations, can lead to social interest”. In fact, both Narasimha Rao and Dr Singh had at that time, dismissed any suggestion of conflict between Fabian socialism and free market reforms. 

Unlike India, billionaires in China saw their net worth eroded. And while global billionaire wealth slowed, India remains an exception. Further, financial analysts believe that India could witness an explosion in billionaire entrepreneurs over the next decade due to the policies pursued by the government, thereby contributing to further economic disparity between the rich and the poorer sections. 

Meanwhile, though the Indian government has vehemently denied the latest World Hunger Report, the country has been ranked 105 out of 127 countries in the study released by Concern Worldwide, Welthungerhilfe and Institute for International Law of Peace and Armed Conflict. It is indeed tragic that while billionaires are on the rise in a developing economy, the number of people battling hunger is rather large.   

Another finding which is no doubt a cause of concern is the fact that the average monthly earnings in rural India fell to Rs 8842 in 2023-24, down Rs 9107 in 2017-18. However, urban wages showed only a marginal increase from Rs 12,847 to Rs 13,006, according to the Periodic Labour Force Survey. But if inflation over the period is taken into account, the urban wages have also gone down. Added to this, the savings rate has fallen sharply, hitting a five-year low of 5.2 per cent of the GDP in fiscal 2024, according to the Reserve Bank of India. With discretionary spending shrinking, consumption patterns have shifted. 

While experts talk of the stability of the economy, it is surprising that the payment meant for midday meal cooks has remained unchanged at Rs 1000 per month since it was fixed way back in 2009. Adjusted for inflation, the value of this amount comes to around Rs 540 per month. The actual money they get depends on how much the state governments are willing to enhance and as most are reeling under severe financial stress, they choose not to pay attention to this segment of society. 

The economic disparity, the increase in unemployment and underemployment and the rising inflation may not be a problem for the upper echelons of society whose interests are largely of crucial interest to politicians and policy makers. Even the urban middle class, traditionally a driver of consumption, is under significant financial stress due to rising inflationary trends. India Ratings (Ind.Ra.) has rightly pointed out that consumption has been affected by factors like adverse weather, stagnant real wages and elevated household leverage. In analysing the results of the first half of the current fiscal, it has been found that eight of the 24 key consumer-facing sectors faced a volume decline. 

Preparations for the forthcoming Budget are underway, and industry associations are listing their recommendations. But nothing is known about the common man as this segment does not have a strong association to put forward its views. Besides, the unorganised labour force goes unrepresented while small peasants can never place their problems before the government. The same is true of tribals and people living in the backward regions of the country. 

Meanwhile, though much is spoken of public sector banks, Congress leader Rahul Gandhi recently alleged these banks are working as private financiers for the rich and corporate entities and were forced to prioritise profit over people, which cannot be denied as huge sums of money are being lent for business purposes. Though banks keep a small percentage for priority sector lending, the maximum money goes to finance big business.   

To further help the business class, indirect pressure was put on former RBI Governor Shaktikanta Das to cut interest rates in the Monetary Policy Committee, but he didn’t yield and as a result it is said he was not given an extension! Seen as being ‘a pro-business government’, boosting the growth momentum of this group, it has done precious little to target inflation, especially food inflation, which affects the lower stratum of society. In this context, it is worth mentioning that when Thomas Piketty and organisations like Oxfam have been talking about the need to tax the super-rich, India’s Chief Economic Adviser spoke against imposing a billionaire tax. His argument that this may stall investment has few takers.     

However, it needs to be pointed that despite poor performance of the present dispensation on several economic indices, such as lack of employment generation, rising inequality and decline in income of small and marginal farmers, the government has been spared of an electoral backlash. This perverse success speaks well of Modi’s diversionary and fractious politics. Moreover, the agenda of Hindu nationalism, which reportedly the previous regimes did not flog, has been pushed to cover up the somewhat distressing social and economic situation affecting the lower segments of society.     

Economists have rightly pointed out that a pro-business and trade-and-consumption driven scenario does make the economy grow but only to a limited extent and does not strengthen the grassroots. Consumption spending has been very low amongst the lower tiers of the population and even among a section of the middle class due to lack of income growth and inflation. All this has given rise to a very high degree of inequality with the wealth and prosperity of the rich and the upper middle class growing fast. The clout of this group has been growing and their pervading influence on the political class has made policies not conducive to the interest of low-paid working class. 

It needs to be reiterated that irrespective of whether the GDP growth is 5.4 per cent or above 6 per cent, the structural weaknesses of the economy remain, and it is distressing that there is virtually no endeavour by the political dispensation to overcome the challenges. It is erroneous to believe that with the present approach the economy can be ‘inclusive’ and strong for which the needs and concerns of the common man as well as that of the rural sector have to be given priority in the coming Budget.---INFA 

(Copyright, India News & Feature Alliance)

New Delhi

6 December 2025