‘22.6% of income’: Why Thomas Piketty thinks India must tax its super rich now

French economist Thomas Piketty has called on India to tax its super-rich, citing alarming levels of inequality. Speaking at an event hosted by Delhi-based think tank RIS and the Delhi School of Economics, the author of Capital in the 21st Century urged India to fulfill G20 finance ministers’ promise in July to cooperate on taxing the world’s largest fortunes.

“India should be active in taxing the rich,” Piketty said, proposing a 2 percent wealth tax on individuals with assets above ₹100 million ($1.18 million) and a 33 percent inheritance tax on estates above the same threshold. According to their estimates, these measures could generate additional revenue equivalent to 2.73% of India’s annual GDP.

The concentration of wealth among India’s richest has surpassed wealthier nations. Citing the 2024 World Inequality Lab report he co-authored, Piketty found that the top 1% of India’s population controls 22.6% of national income and 40.1% of the country’s wealth; this figure is higher than in the USA and Brazil.

This concentration has been fueled by increasing wealth among India’s elite. According to Forbes, last year the cumulative wealth of India’s 100 billionaires increased by over $300 billion to $1.1 trillion, largely driven by the rise in the stock market.

India abolished its wealth tax in 2015 and has resisted calls to reintroduce it. Finance Minister Nirmala Sitharaman has opposed the inheritance tax, citing possible burdens on the middle class. Chief Economic Advisor V. Anantha Nageswaran echoed this sentiment at the same event and warned that higher taxes could lead to capital outflow.

As debates over wealth inequality and taxation intensify, Piketty’s call underscores a growing tension between eliminating economic inequality and preserving economic growth.