Whew! Thank God it isn’t as bad as I feared. I was worried the Mahatma Gandhi National Rural Employment Guarantee Act, the Right to Food and the hundreds of other social security schemes were eroding our wealth and giving it away to the poor. They were all telling us the Congress and the National Advisory Council were taking us back to socialism and were hell-bent on redistributing our hard-earned money. It’s bad enough having that socialist clause in the preamble to the Constitution and if they start implementing the damn thing, this country would go to the dogs, right? I feared it would have to be class war. That’s why it’s such a relief to read the latest Credit Suisse Global Wealth Report that came out last month. These guys aren’t some stray NGO, you know, they’re hard- boiled Swiss bankers and when they say something I listen.
The good news — Credit Suisse says personal wealth in India has risen by a factor of 3.1 since 2000. But here’s the icing on that cake — the top 10% of Indians now own 74%, or almost three quarters, of the country’s wealth. That’s not bad, particularly when the top 10%, dear reader, in which both you and I and other readers of English newspapers fall, owned a mere 65.9% of the country’s wealth in the year 2000, according to Credit Suisse’s estimates. Sure, India is developing rapidly and getting richer, but we at the top practically own this country. I suggest, though, that our aim should be that post-socialist idyll Russia, where the top 10% own, hold your breath, 84.8% of the country.
The bottom half of the Indian population, the poor sods, own just 4.5% of the nation. The bottom three-quarters of the Indian population had a fifth of the country’s wealth in 2010, but that is now down to a sixth. They just have to work harder and improve their productivity if they want a larger share. Also, does it really matter if their share is shrinking if the total pie is growing and some of the fruits of the awesome productivity of the top 10% trickles down to the lower classes in the fullness of time? Of course, being at the bottom has some unpleasant consequences. A recent World Bank report, for example, said, “Of 1000 children born in India’s poorest population quintile (or bottom fifth) 82 will die within 12 months and 117 within five years.” That’s quite a massacre of the innocents.
On second thoughts, readers of English newspapers would definitely be in the top 5%, owning 65.5% or almost two-thirds of the country. Those who are lucky enough to be in the top 1% own 49%, or almost half the nation’s wealth. That’s up from a low 36.8% in 2000. Best of all, this doesn’t even include black money. If we add that in, the share of this immensely hard-working, super-productive top 1% will probably reach the Russian level, where they own two-thirds of the total wealth. Contrast the left-wing socialist UK, where the top 1% has a measly 23.3% share.
Many years ago, during the country’s so-called socialist days, noted Pakistani economist Mahbub-ul-Haq said that India’s economic system was “10% socialism”, meaning that the fruits of the supposedly socialist economy benefited the top 10%. Thankfully, those dark days are far behind us. Nowadays, we have 10% capitalism.
Manas Chakravarty is Consulting Editor, Mint
The views expressed by the author are personal