Mitra Weighs In on the Issue of Wealth Taxation in India in Al Jazeera Article

May 14, 2024

Al Jazeera

Elections

Government

India

Al Jazeera

Devashish Mitra

A new debate has gripped the campaigns of both India Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP) and the opposition Congress party.

At the heart of this latest political conflict is the idea of a potential redistribution of wealth. But while the Congress party has alluded to the need for some resources to be reallocated to traditional marginalized economic and caste-based communities, Modi and the BJP have accused the opposition of plotting to hand over wealth from Hindu households to Muslims.

Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs, says that some wealth distribution “might not be a bad idea.” But, he adds, “it is a politically contentious issue, and there might be political problems in enacting any kind of means to redistribute wealth.’’

One solution, Mitra says, might be to combine wealth redistribution with “some reduction in income taxes.” That would partially compensate for the wealth redistribution. “Then, we will have a combination of wealth taxes and income taxes that could lead to both greater equity and greater efficiency than in the current situation,’’ he says.

Read more in the Al Jazeera article, “Should India take from the rich, give the poor? A new election flashpoint.”