Raksha Kumar: Welcome to Unequal India Decoded, a podcast from the Tax Justice Network. We take 30 minutes every month to dissect economic inequalities in India, which is one of the most unequal countries in the world. And we try to offer solutions for building a fair place for its billion and a half people.

I am Raksha Kumar, and as a journalist, I travel to different parts of the country to report on stories of land ownership, forest rights, climate justice, among so many other issues. And more often than not, I find myself surrounded by conflict. People fighting over coal mining or road constructions or some such.

And before you know it, these conflicts become something different altogether. They become conflicts about religion or caste or some other form of identity. And I’ve tried to wrap my head around all these different political identities for over 15 years now, but at the root of it, I’m aware that they’re all conflicts between the haves and the have-nots.

TRANSITION MUSIC, PLANE & LANDING SOUNDS

If you ever landed in Mumbai, you couldn’t have missed blue tarpaulin sheets that seem to carpet almost all of the city. They actually cover the tin roofs of what are insultingly called slums, but are homes to almost one in two Mumbaikars. And as your plane is landing, you see some buildings at your eye level. Multi-storied, obviously they’re swanky, often glass covered and are much fewer in number than the bright blue tin roof structures.

Now consider this. Those blue plastic sheet covered homes are approximately the size of just one bathroom in those tall buildings which seem to touch the sky. We are so used to these inequalities that we are almost immune to them. We just don’t notice it, like the polluted air we breathe.

Mumbai, which is India’s financial capital, might be divided into these blue and non-blue areas, and other cities might not be as obviously color-coded, but inequalities are all over. No matter what city, when you stop at a traffic signal in your car or your scooter, women with toddlers hanging from their waist approach your vehicle and beg for money. They are usually with entire families, they’re nomadic communities that camp on roadsides. There are so many of them, we stop noticing them after a point.

Or try this. Ask your vegetable vendor how much he makes in a month. It might just be equivalent to how much you spend on one dinner in a good restaurant. You probably have one domestic worker working for you, if not more, who’s uh, let’s say two weeks pay is how much you might spend on a piece of branded clothing. And how do I know all this about you? Because you’re listening to this podcast in the English language. You’re already among the top earners in the country.

English is the language of privilege. It’s the language that gets you access to white collar jobs, it’s the language that lets you access technology. And now that I know so much about you, you might wanna ask where I stand on the economic ladder. I think I would call myself middle class in big air quotes. And in India, that means we pay direct taxes, which is the income tax, we take foreign holidays to Cambodia and Vietnam and not to Europe and the United States, and we most likely own a piece of property.

Three decades ago in my childhood, a Cadbury chocolate bar was an expensive gift that I would eat over several days because I feared that I might not see another for many, many months. But over the years, thanks to my caste privilege, the scholarships, I’ve managed to climb up the ladder. So today, I live in a rented house. I’m a consummate public transport user, I do not own a car, but I admit I spend on expensive coffee in cafes at least twice a week. I’m among the top 7% income earners in the country. And my bet is most of you are too.

MUSIC

In this new podcast, I’m on a journey. A journey with the Tax Justice Network, which is a network of global researchers and advocates who have been working to prove that existing tax structures and global financial systems are not serving anyone except the wealthy and the most powerful multinational companies. I agree with them. There are better ways to run the world. A fair tax system, financial transparency and strict anti-corruption policies can make everyone’s lives much better. And in this podcast, we’re going to look at how we can do that.

To kick off our first episode, let’s talk about something that happened a few weeks ago. The big news across Indian media was that India had overtaken Japan to become the fourth largest economy in the world. There was a lot of back patting over that.

Newsreader: India has become the fourth largest economy in the world, overtaking Japan…

Raksha Kumar: The media is supposed to ask questions like on what basis did they reach that conclusion? Why now? And what it means for the average Indian. But they just said…

Newsreader: …so, major, major achievement. India has overtaken Japan to become the fourth largest economy in the world!

Raksha Kumar: This whole story raises really important questions. Does the size of the Indian economy really mean life is better for its people? The deputy associate editor of the Indian Express Udit Mishra wrote an article explaining those numbers to his readers. It had a rather provocative headline, why India is the third largest Economy it read, not the fourth or the fifth. I spoke to Udit after the story was published.

Udit Misra: In my piece actually, I was trying to have a bit of fun, but also inform readers that this whole debate about whether India is the third largest or fourth largest or fifth largest has to be seen in a, in a context, of what it means to an average Indian. So just to take a step back, first of all, the government’s claim was coming from use of IMF data, which is a projection for the end of 2025. And according to that, it says that by the end of 2025, India will overtake Japan. Now, the opposition parties or those who criticize the government on this claim are saying that, well, 2025 hasn’t actually ended, so you can’t really claim that India has become the fourth largest economy.

Raksha: Udit said this overtaking of Japan was actually predicted about a decade ago.

Udit Misra: It is also a fact that since the global financial crisis in 2008, the biggest economies have been struggling to grow. There’s been a sort of a widespread economic stagnation in the so-called developed economies, the top economies, and barring United States and China, most of the economies like the UK, Germany, Japan have struggled to grow fast. It has been known that India with the growth rate of 6% or around about that was projected to steadily overtake one by one the top economies, and so it is only a matter of time that India will overtake Japan and will overtake Germany to become the third largest economy.

Raksha Kumar: In 2022 I saw similar enthusiasm in India when its GDP overtook the GDP of the UK. What with overtaking the former colonizer and all, even then, Udit told me those numbers meant very little practically.

Udit Misra: What has happened since 2022 when India overtook the United Kingdom in terms of overall GDP if you look at the, the average GDP, then in just those three years the average GDP in United Kingdom and United Kingdom has gone through a fairly tough phase in terms of economic growth and everything, the average GDP in UK has grown by $8,000 just in the last three years. And in India it has grown by just $600, in the last three, four years. So what we are seeing is that even though India has overtaken the United Kingdom on aggregate terms, at an average level the income growth in the UK is like four times the actual income in India. So it’s just mind boggling the difference that is there.

The other bit is that what we are talking about when we say average GDP is basically an arithmetic mean, and it still doesn’t capture, the level of distress that is there for an average Indian, because arithmetic mean basically means you take, you know, the richest person to the poorest person, add everybody’s income and just simply divide that by the total population, but the more relevant thing would be to look at something like a median income, uh, which would perhaps give you a more accurate picture. And in India’s case, given the inequality, that number is going to be even lower

Raksha Kumar: And now let’s turn to what all the hype around India overtaking Japan means to the average Indian.

Udit Mishra: There are two ways to sort of look at it. One is that a growing economy essentially means that there are more opportunities for the government of the day to raise revenues, and those revenues can then be used to allay the gaps or the inequalities that the growth process typically brings, there’s more money or resources at the disposal of the government of the day to redistribute, to, you know, provide some kind of a social safety net economic safety net to people who might have been left out of the growth process. So that’s, at one level, it’s a good thing that India’s economy is growing and, whichever terms you take, our growing economy is a great, great thing for, especially for the poorer people because the government can then come and help them.

Raksha Kumar: Great! Having more resources to redistribute sounds fantastic, but have there been examples of substantial redistribution though?

Udit Misra: This whole debate should also look at the nature of India’s economy and the nature of India’s economy is that it is a highly unequal economy. According to one estimate, inequality in India today is even higher than what it, what was experienced during the British Colonial rule so it is quite a stark situation. And there are many reports which suggest that post-covid, the recovery that India’s economy has seen is also fairly iniquitous, you know, we use a term called K-shaped recovery that the better off sections of the economy got even better off, became even richer and the sections of the economy, the large sections of the economy which were already struggling, became even worse, or at least didn’t recover as quickly as the top section of the economy.

Raksha Kumar:  These are all things that a just tax system and anti-corruption reforms can address though. Thanks to Udit for his time and all the work he does.

TRANSITION: MUSIC

When it comes to tax, people usually think, oh God, I don’t wanna pay those. Why pay an inefficient government?! Well, over the coming episodes, we will explore what just taxes and financial transparency can do for us Indians. However, it’s not just about India.

So the question is, who makes the tax rules globally? For decades, it’s been the OECD, the Organization for Economic Cooperation and Development. The Tax Justice Network calls them kind of a ‘rich country club’ of nations, 38 rich countries, making rules for themselves and their own interests and those of their multinationals.

OECD making global tax rules is like the captain of the stronger cricket team being the umpire too! A lot of OECD members are formal colonial powers as well, which is why the Tax Justice Network says, let’s take another approach: the United Nations may not be perfect, but it’s a fairer, more democratic space for all the countries to agree on global tax rules. Especially now:

President Trump: This is one of the most important days in my opinion, American History. It’s our Declaration of Economic Independence. My fellow Americans, this is Liberation Day, April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed…

Raksha Kumar: Earlier this year, when Donald Trump began to meddle with established economic systems, many observers said that we are now stepping into a new era. An era where the US might not be the strongest economy for much longer. An era where countries are forming new alliances, power is shifting. The group of seven nations, or the advanced nations, as they’re called, have begun inviting countries like India. Canada’s Prime Minister welcomed India to the G7 this year,

Candian PM: It’s a great honor to, uh, to host you at the G7. It’s a testament to the importance, uh, of your country, and to the importance of the issues that we look to tackle together, from energy security, from the energy transition that you’re helping to lead to the future of artificial intelligence.

Raksha Kumar: India recently held the presidency to the G20 where it wowed to bring the developing nations to work together.

G2O Summit, Modi:

Raksha Kumar: And BRICS countries have spoken about having a parallel structure to the World Bank and SWIFT:

News clip: …to make their voice stronger, BRICS have used a twofold strategy. On the one hand, they lobby for reforms of the World Bank and the IMF. On the other hand, they put forward their own institutions like the new development bank, it finances development projects in member states such as electric buses in Brazil, a hydropower plant in Russia, or water supply in India. And it does so in a way that often suits these countries better…

Raksha Kumar: And then there is the UN. It brings together countries once every 10 years to try to address financing development goals like education, water, clean air,, et cetera, in poorer nations. And the convening has had a rather matter of fact name: financing for development.

This summer I attended one of those. I landed in Sevilla in southern Spain where it felt like walking on the concrete dials of Connaught Place while Delhi’s heat seeps into your skin. And after a while, it almost feels like you are eminating the heat yourself. Except, let me tell you, Sevilla was worse!

A whole bunch of world leaders had come to the venue in Sevilla Este a few kilometers away from Sevilla’s old town, which houses the world’s largest gothic cathedral. Like in other UN conferences, makeshift rooms, the size of cricket stadiums were constructed to hold the delegations from different countries, the media, the organizers, and the like. And the activists were limited to one building where they held panel discussions throughout the day about financial systems, fair taxation, multilateral cooperation, and all those big phrases that mean very little unless acted upon.

And the heads of state and senior representatives of the government were in an adjacent building. One could not enter it unless one registered with a UN escort or jumped through similar hoops. All the segregation made me wonder how much have the powerful really understood the issues that need addressing. They came in through another gate in a cavalcade and left with little to no conversations with the activists or researchers.

And yet, one thing that came out of the Fourth International Conference on Finance for Development was a new coalition between Spain, Brazil, and South Africa to tax their super rich. This was achieved even though the US chose not to come to the conference, in keeping with what seems to be the trend in their country these days.

I spoke to Professor Jayati Ghosh at the FfD4. She’s worked on creating fair financial systems for decades now. We stood huddled in one corner of the building. We were allowed in while people busily walked about organizing the dozens of panel discussions. I asked her about the context of shifting power within this conference and outside it. And I must admit, she has a way to see the silver lining more than the dark cloud.

Jayati Ghosh: I think one of the things that is perhaps, you know, good about Sevilla and Ffd4 is that it’s happening at all in a world where otherwise people say multilateralism is over, it’s dead, this at least shows the possibility that even if a very large and earlier dominant country seeks to withdraw, the process can continue. And everyone’s interested in it continuing, so that’s an important positive.

Here in the, in the space for civil society, we’ve had much more vibrant, critical, energizing discussions. In the official fora, it’s been very much business as usual and almost even pretending that the last few months have not been a seismic revolution in geopolitics, pretending that President Trump didn’t happen in a way.

So I’m optimistic, not because of what happened in those official and plenary sessions, but because of the platforms for action because civil society seems to be much more on the ball about what is happening, and the breakdown of multilateralism that we are seeing is evidence of the fact that the current systems which are designed to favor the powerful are incapable of handling it. So my optimism comes in a way from the break down. It’s the breakdown of a system that was not in the interests of the global majority. The alternative being offered by President Trump is even less in the interests of the global majority, but once global majority recognizes this, there is then the potential to actually get some real change.

Raksha Kumar: The last FfD was in Ethiopia’s Addis Abbaba. Since then, the world’s richest 1% increased their wealth by more than $33.9 trillion, which according to Oxfam, is enough to eliminate poverty 22 times over. And despite the spectacular failure of the private sector to bring about development, India’s Finance Minister Nirmala Sitharaman gave a speech saying we should continue down that same path.

Nirmala Sitharaman: The importance of private capital cannot be overstated. Private investment is a catalytic force, unlocking capital, boosting productivity, fostering innovation, and introducing technological rigor, all essential for inclusive, sustainable economic growth.

Raksha Kumar: Jayati told me that such a message from the minister was disappointing. And the only way this conference could make a difference is if it went beyond such messaging.

Jayati Ghosh: Unfortunately, neoliberalism became global. So even when it was held in Addis, it was fundamentally dominated by, if you like, the broader neoliberal ethic. And we’ve seen a lot of that here in all of the official and plenary sessions. We’ve seen a lot of emphasis on private roles and on the importance of encouraging, subsidizing, incentivizing private finance, which we all know now is dead. The billions to trillions agenda, which was 20 years ago, it has not just failed it’s actually led a lot of low and middle income countries up the wrong path. So that continues. It isn’t dead.

So in a way, I think the main contribution of this would be if it goes beyond this conference, if it generates platforms for action, which get more and more coalitions, including coalitions of debtor countries, coalitions of countries that hold natural resources and so on.

Raksha Kumar: And so I asked her about how all of this relates to India.

Jayati Ghosh: I think the Indian growth story, yes, it’s supposedly one of the fastest growing economies. We don’t know for sure because our GDP data have also been manipulated, but even if it is one of the fastest growing, we know that most of that growth is going to the top 10% and in fact, to the top 1%. So the share of profits in GDP is rising. Profits and rents in GDP is rising. The share of wages and self-employed workers is falling. Within the share of capital, the big company’s share is rising. Within big companies, the share of multinational profits is rising, so all of the things that are happening globally, they’re kind of accentuated and intensified in India. And so we represent, if you like, the broader way in which globalization works to the advantage of those who are already rich and privileged. It reinforces government policies that add further to their economic power, which in turn reinforces their political power. It’s a vicious cycle in that direction, and there is confusion among those who are not benefiting. I think that’s the problem that, you know, neoliberalism has embedded itself so deeply that people have forgotten that, that all of this is because of states, not in spite of states. And people have to reassert their control over state policy.

You do need to actually remember the people also have power. And that you can be a countervailing force. You don’t have to accept everything that’s happening because they have special access or they can lobby more. And I think in some states that has already been shown.

We have many other problems. We have the fact that, uh, a ruling party that is going all out to influence the electoral process itself in every possible way and is aided by the large cronies who are beneficiaries of that whole political and economic combination, that is a major constraint. But, you know, constraints like this have been overcome in other countries in the past, and I, I firmly believe they will also be overcome in India.

Raksha Kumar: One of the top questions is if there are countries like South Africa, Spain, Brazil, that are taking steps to tax their high net worth individuals, will India join? What are the hurdles? How do we look at it as Indians?

Jayati Ghosh: One of the contradictions in India is that at the global level, we say we are very progressive and egalitarian, and that we want to increase social protection. We want to reduce inequality. India signed on to the G20 declaration about taxing their extreme wealth. And at that point, no Indian delegation raised any kind of point of dissent. The same government that signed onto that declaration has been openly against opposition parties saying that, that they would like to tax extreme wealth and have been distorting their arguments to claim that, you know, your people are going to enter the houses of the middle class and the poor and take away half of what they have and things. So there is a political contradiction, no doubt about it, between the external public image that the government of India wants to project and the what they’re doing internally. I believe that we, in India, the civil society, we have to hold our government to account if they are making commitments globally. They have signed on to the Sevilla compromise, which is a, a fairly progressive document. Especially on taxation. We should hold our government to it.

Raksha Kumar: So these kind of double standards that you are talking about, where India would maybe come sign on a document like this but the fact that they’re not implementing anything that they’ve signed on to is a matter of concern and I’m also trying to understand where the big challenges lie. I’m sure there are several.

Jayati Ghosh: There are several. One of the biggest challenges really is data, which is something frankly earlier we did not have to worry about. We would assume that our statistical agencies have a degree of autonomy and are producing the best data they can do objectively. We can no longer assume that, it’s been completely politicized, so we don’t have any more adequate data, not just on GDP, but on the population itself. We haven’t had a census for 14 years. We don’t know how exactly they’re going to do that conducting. We’ve seen the consumption surveys change in methodology and orientation and come up with frankly, unbelievable numbers where poverty is apparently down to less than 4% of the population. We’ve seen the trashing of other surveys that expose a reality, let’s say, the National Family Health Service that exposed the reality of child under nutrition and, uh, inadequate sanitation and so on, just the trashing of those and the punishing of the people who led the surveys. So, increasingly the government can claim it is meeting all the targets because it manipulates the data to suit itself. That is one of our biggest challenges and it’s more than in other countries where you still have independent agencies that are able to tell you really what’s going on and I think that’s going to be one of the biggest problems that civil society faces, that you are not telling us the real story because they’re producing official data that pretend that that is the real story.

Raksha Kumar: And so we don’t really know what the real story is?

Jayati Ghosh: Increasingly, we don’t. In other words, poverty is down to less than 5%, but I can take you to neighborhoods in Delhi, in Delhi, the richest part of the country where you will find more than 20% people are actually poor in any definition, right? So there are all kinds of concerns with the data itself, but in addition, I think we have to worry about getting the narrative across to ordinary people. There’s been uh, somehow, partly because of the official and mainstream media, the Godi media, and partly because of this ability to influence official data, we are unable to bring our narrative to the people in general. And that in turn affects, of course voting behavior, we need social movements to push back against this.

Raksha Kumar: Right, and how does one push back against this? In future episodes, we will look at how social movements can harness tax justice and financial transparency to address India’s challenges.

In the next episode, we are kick-starting a segment called The Story of the Rupe, where we tell you the story of how colonial powers are, the root of the economic inequalities in our country, and how they continue to affect us even today. We will talk to experts who will take us back to the past, so we try to make our future a little better. Thank you for joining us. You can subscribe to this podcast on Apple Podcasts or through our website: podcasts.tax justice.net.

Tell us what you think about the podcast and anything else you might want to hear by emailing us on [email protected]. There are links in the show notes that give you more context on everything we’ve spoken about today. You’ve been listening to the first episode of Unequal India Decoded from the Tax Justice Network. I’m Raksha Kumar, and we’ll be back next month. Thank you for listening in.