Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday, 2 February 2018

Wealth : Ownership & Distribution



Last few weeks saw media reports from Oxfam / New World Wealth , re: ownership of world’s wealth among its population


From reports published in Times of India / Business Line / DNA , I tried to piece together , following figures for India




INDIA POPULATION ( 2016 ) :


·         100  %   ………………………………………. 1324  million

·              1  %  …………………………………………..  13  million ( rounded off )

·            99  %  …………………………………………. 1311  million



INDIA TOTAL  WEALTH :


·         2016  …………………………………………..   $   6,600  Billion

·         2017  …………………………………………..   $   8,230  Billion ( $  8,230,000  million  )



2016  SCENARIO  :


Finding :  India’s  1 %  of persons held its 58 % of wealth ( in 2016 )


Implying :


·         13 million Indians ( 1 % ) ,  held $ 3,828  Billion = $ 3,828,000 million ( 58 % )  of wealth


·         So , each of these Indian held  $ 294,000  of wealth !


·         Balance 99 % of Indian held 42 % of the wealth


·         So, 1311 million Indian held $ 2,772 Billion = $ 2,772,000 million  of the wealth


·         So, each of those poor Indians held $ 2082  worth of wealth  !





WHAT  IF  ALL THE  WEALTH  WAS  EQUALLY  DISTRIBUTED AMONG  ALL ?


·         $ 6,600,000 Million to be distributed equally among 1324 million Indians


·         That would give each Indian , $ 4,985  worth of wealth


·         So each of these poor Indian would get transferred into his account, some $ 2900 ( Rs 1,88,500 ) from those rich Indians ( ie : Rs 15,708 per month for next 12 months )






WEALTH  CORNERED  DURING  2016-17



Finding :


·         Wealth generated during 2016-17


     $ 1.63 Trillion ( $ 8.23 Trillion  -  $  6.6 Trillion ) = $ 1,630 Billion = $ 1,630,000
     Million



·         73 % of generated wealth ( = $ 1.19 Trillion = $ 1,190 Billion = $ 1,190,000 Million ) cornered by 1 % of population ( ie : by 13 million Indians )



·         So , each of those 13 million rich Indians,  “ cornered “, $  91,538 of the Wealth generated



·         Balance 27 % of the wealth ( = 27 % of $ 1.63 Trillion = $ 0.44 Trillion = $ 440 Billion = $ 440,000 million ) , went to 1311 million Indians



·         So , each of those poor Indian managed to “ corner “ , $ 335 worth of wealth






QUESTIONS :


·         Can there be a somewhat better ( less unequal ) distribution of wealth cornered by the rich 1 % of the Indians by taxing them more ( than at present ) ?



·         How much more can we think of taxing the rich , with the sole purpose of obtaining a better distribution of wealth ?




·         If we agree that no amount of additional taxing of the rich , can bring about rationalization of wealth distribution , then what “ other  purpose “ can taxing of the super-rich , serve ?




·         Could that purpose be “ raising of resources “ for Infrastructure building ?



·         If so , how much resources can be raised ( for this Infrastructure Building purpose ) , by how much extra tax on the rich ?



·         If this ( additional tax on the rich ) ,  is unlikely to serve this other purpose , what else can we do to raise resources ( for Infrastructure Spending ) ?


I hope some Economic Experts will come up with an explanation of which “ purpose “ has 2018 tax proposals have managed to address




03  Feb  2018



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