Opposition seeks PM Modi's stance over wealth tax for Budget 2024

New Delhi: Finance Minister Nirmala Sitharaman is gearing up to present the first budget of Modi government’s third term on July 23, with expectations soaring across all sectors of society, from ordinary citizens to corporate giants, eagerly awaiting the Union Budget FY 2024-25. Amidst these anticipations, there is a growing call for the introduction of a distinct tax regime targeting the affluent. The opposition party, Congress, has vocalized its demand for a ‘billionaire tax’ aimed at India’s wealthiest individuals.

The debate surrounding the taxation of the wealthy, its potential revenue implications for the government, and its proposed utilization have been ongoing. This issue of bridging economic disparities through separate taxes on the affluent has garnered renewed attention in India, particularly in the aftermath of the heated discussions during the 2024 Lok Sabha elections. As the full budget for FY 2024-25 looms, the discourse on wealth tax is once again taking center stage.

Jairam Ramesh, Congress Secretary General, underscored in a recent statement that implementing a ‘billionaire tax’ could potentially inject ₹1.5 lakh crore annually into government revenues, approximately 0.5 percent of India’s GDP. He emphasized that these funds could significantly bolster critical sectors such as education, healthcare, and other essential national schemes, given India’s current count of 167 billionaires.

Ramesh further highlighted a global consensus advocating for billionaires to contribute their fair share in taxes, with Brazil leading discussions on behalf of the G20 and receiving support from countries like France, Spain, South Africa, and Germany. This global momentum is leaning towards imposing a 2 percent tax on billionaires, a proposal slated for discussion at the upcoming G20 meeting by month-end.

Ahead of the budget presentation, Prime Minister Narendra Modi’s stance on this proposal is eagerly awaited, particularly in light of a post-Lok Sabha election survey revealing widespread support among Indians for taxing the super-rich. According to surveys conducted by Earth for All and the Global Commons Alliance, 74 percent of Indians believe that imposing a super-rich tax is justifiable, signaling strong public sentiment towards equitable wealth distribution.

The demand for a ‘billionaire tax’ by Congress is not singular, reflecting broader concerns about fiscal fairness. Following debates on wealth tax, attention has now shifted to speculation surrounding income tax revisions, including potential increases in the standard deduction limit and basic exemption thresholds under the new tax regime. The clarity on these speculations will unfold with Finance Minister Nirmala Sitharaman’s budget address on July 23.