India must do more to tax its super rich, says Economist Thomas Piketty

The author of the best-selling book “Capital in the 21st Century” urged India to fulfil a July commitment made by the finance ministers of the Group of 20 major countries to work together to tax the wealthiest people in the world.

Piketty stated, “India should be active in taxing the rich,” during a gathering hosted by the Delhi School of Economics and the think tank Research and Information System for Developing Countries (RIS), located in Delhi.

He said that by enacting a 2% wealth tax on individuals with assets above 100 million rupees ($1.18 million) and a 33% inheritance tax on property valued at least that much, India could increase yearly income by 2.73% of its gross domestic product.

Citing a 2024 research he co-authored and released by the World Inequality Lab, Piketty claimed that the share of national income controlled by the richest 1% of Indians now exceeded that of their counterparts in the US and Brazil.

He stated that in 2022–2023, the wealthiest 1% of Indians had 40.1% of the country’s total wealth and controlled 22.6% of its national GDP.

V. Anantha Nageswaran, the chief economic adviser to the Indian government, spoke against Piketty’s proposal at the same occasion, claiming that higher taxes may result in more outflows.

After doing away with the wealth tax in 2015, the Indian government has refused to reinstate it or impose an inheritance tax.

The “middle and aspirational classes” may be impacted by inheritance tax, according to Indian Finance Minister Nirmala Sitharaman in April, which would make it harder for them to leave money or modest land holdings to their offspring. At the moment, India does not impose an inheritance tax.

According to Forbes’ list of the richest Indians, which was released this month, the stock market boom has helped the country’s 100 billionaires’ combined fortune rise by more than $300 billion to $1.1 trillion over the past year.