Appeal to PM to Levy 2% Wealth tax on Richest 1% to Combat Corona Pandemic

To,
The Prime Minister,
Government of India,
New Delhi.

On 14th April 2020, in your address to the nation, you announced an extension to the countrywide lockdown till 3rd May. You argued that the lockdown had managed to control the spread of the coronavirus pandemic till now, but the extension was needed to finally defeat it. You also called upon the people for yet more ‘restraint, penance and sacrifice’.

Relief Package: Inadequate and Incomplete

However, neither in this speech nor in your earlier speeches, you talked of the impact of the lockdown on the millions of people who, due to the sudden loss of their jobs, are presently on the verge of starvation. Most of these people represent the unorganised sector which constitutes 93% of the nation’s workforce. A substantial number of them, probably as many as 14 crore, have migrated to cities from villages in far-off states. They were given hardly any time to pack up and take public transport to their homes since the trains, buses and trucks were halted at midnight of 24th March at less than 4 hours notice, when the first lockdown was announced.

In this background, the relief package for this huge number of workers announced by your government on 26th March is terribly inadequate and incomplete. According to Article 21 of the Constitution, the Central and state/UT governments have the obligation to ensure all essentials to enable the dis-employed workers, from both the organised and unorganised sectors, to lead a ‘life with dignity’ during the lockdown and thereafter as well. But your government has chosen to save money while implementing without any planning the lockdown as an instrument for delaying the spread of the disease. In the process the economy has been shattered.

Ramping Up Corona Testing: A Challenge to Reinvigorate the Public Health System

In your 14th April speech, you did refer to the additional medical provisions made in urban areas during the past few weeks for the Covid-19 patients. However, very low public expenditure has reduced our public health services, in the urban as well as rural areas and the tribal hinterlands, to a dismal state. It is because of this dismal state that your government is not ramping up testing for Coronavirus victims (testing rate as on 27th April was only 48.2 per lakh people, with India’s rank being 142 amongst 173 nations). Your silence on increasing government spending on public health services is beyond comprehension. The country needs a nuanced strategy, based on district level mapping and identification of high disease load areas for focused work, to economically use the few tests kits available. People’s trust and participation is key to success and not threat or punishment that is being meted out to them.

Since adequate facilities for quarantining, isolation, and treatment do not exist, community isolation centres have to be created at the Primary Health Centre and Sub Centre level, and only those who require institutional treatment should be sent to hospitals. The emphasis has to shift from tertiary care to strengthening the infrastructure for National Health Mission. To contain the spread of the disease we have to train more community people to trace contacts of those identified as infected, and then quickly test them even if they are asymptomatic. The lockdown can slow the spread of the disease only if we do planned and rigorous contact tracing and testing. Otherwise the window of opportunity provided by the lockdown would have been wasted.

There are news reports that your government is considering a phased lifting of the lockdown. But unplanned relaxation of the lockdown, without parallel contact tracing, testing, quarantine, isolation, and supportive treatment will lead to a resurgence. We repeat, lockdown is NOT a cure, it is only a step to prepare for action.

Global experience (of countries like China, New Zealand and South Korea) shows that the only way in which the virus can be controlled and defeated is by increasing the testing several-fold in order to identify all the Coronavirus-victims, symptomatic or not, followed by quarantining and/or isolating them and making arrangements for providing supportive treatment to them if their health deteriorates. This undoubtedly calls for a significant increase in your government’s expenditure on the Public Health System.

Corona Pandemic-Related Budgetary Gaps: Need to Change Political Priorities

The need to reinvigorate the Public Health System calls for additional investment of at least 1.5% of GDP, i.e. about Rs. 3.4 lakh crore, apart from what is already being spent.

The private sector reportedly owns almost two-third of the hospital beds and 80% of the ventilators, while handling only 10% of the COVID-19 critical cases. Your government needs to take control of all private hospitals, nursing homes and private testing labs in order to respond urgently and adequately to combat Covid-19.

Even if the lockdown is gradually lifted, the consequent economic crisis, food insecurity, and, more significantly, joblessness, being faced by the people is going to last for months to come. At the minimum, your government needs to provide the necessary rations and other essentials plus a minimum monthly cash support of at least Rs 4,000 per family to all such households (roughly, 20 crore families) across the country, irrespective of whether they have ration cards or not. If this support is provided for at least two months, it is going to cost the government around Rs 2.4 lakh crore.

Additionally, as the people return to the villages and remain there till the economy starts recovering and they can migrate back to the cities, your government would in the coming months need to substantially increase the provision for employing people in MGNREGA. Your government also needs to launch a similar ‘urban employment guarantee scheme’ for at least the small towns, to begin with.

All this would call for a significant increase in the proposed relief package from Rs 1.7 lakh crore at present (out of which roughly half the amount is simply repackaging from the budget) to at least Rs 10 lakh crore.

Call to the Super-rich: Practice ‘Restraint, Penance and Sacrifice’, Follow the Constitution

Your government can easily raise the required funds by levying an Emergency Coronatax on the wealth of the Super-rich. According to Oxfam and Credit Suisse reports, the richest 1% in the country had a total wealth of Rs 381 lakh crore in 2019. Assuming a growth rate of 25% in their wealth, this would have increased to Rs 476 lakh crore in 2020. Levying of a nominal 2% Wealth Tax on the Super-rich as an emergency measure would yield Rs 9.5 lakh crore in additional revenue to your government adequate to pay for all the measures suggested above.

This proposal of levying 2% Wealth Tax on the Super-rich is mandated by the Constitution in Article 38(2) “minimise the inequalities in income”; and Article 39(c) – “[securing that] . . . the economic system does not result in the concentration of wealth . . .” Hence, in accepting our proposal, you would be only implementing the Constitutional imperative, thereby according credibility to your tribute offered to Babasaheb Dr. Ambedkar on his Jayanti in your 14th April address, on behalf of “We, the People of India”.

We draw your attention once again to your 14th April address wherein you called upon all the people in the country to practice ‘restraint, penance and sacrifice’ for the sake of defeating the Coronavirus Pandemic. Probably in tune with the spirit of this appeal, the Finance Ministry has decided to freeze the Dearness Allowance of central government employees and Dearness Relief of central government pensioners for 18 months, as well as deduct one day’s salary of its employees every month for one year. We would like to believe that your appeal included the afore-mentioned Super-rich (i.e. the richest 1%) as well, since they are, too, India’s citizens. However, as is evident from the previous paragraphs, your appeal is being applied only to the vast unorganised sector, other sections of the lower middle classes, as well as the government employees, constituting more than 85% of the people.

There is no reason why your government should not ask the Super-rich (arab-patis and kharab-patis) to also do their bit and sacrifice a mere 2% of their wealth for the country to defeat the Corona Pandemic (the central government employees are being made to sacrifice more than 3% of their annual income, apart from losing Dearness Allowance too)! After all, the huge wealth amassed by the Super-rich has been extracted from the “sweat of [the] brow” of the common people, to use an expression coined by Mahatma Jotirao Phule in 1882 while referring to how the British empire spent the revenue collected from the masses to benefit only the upper classes and castes!

We, the undersigned, urge upon you to immediately levy a 2% Emergency Coronatax on the richest one percent in the country and use the additional revenue thus collected to substantially increase the relief package announced by the government to at least Rs 10 lakh crore in order to effectively engage with the huge humanitarian crisis being faced by the country and successfully combat the Corona Pandemic. 

  • Dr. G.G. Parikh (Renowned Gandhian Socialist; Editor – Janata Weekly, Mumbai);

  • Justice B.G. Kolse Patil, Pune (Retd. Judge, Mumbai High Court);

  • Medha Patkar, Barwani, MP (Narmada Bachao Andolan; National Alliance of People’s Movements);

  • Padmashree Devanooru Mahadeva, Bengaluru (Reputed Kannada Writer)

  • Jignesh Mewani, Ahmedabad (MLA, Vadgam, Gujarat; Rashtriya Dalit Adhikar Manch)

  • Aruna Roy, Distt. Rajsamand, Rajasthan (Mazdoor Kisan Shakti Sangathan)

  • Prof. Anil Sadgopal, Bhopal (Former Dean, Delhi University; All India Forum for Right to Education);

  • Prof. Jagmohan Singh, Ludhiana (Association for Democratic Rights);

  • Dunu Roy, Delhi (formerly with FREA; presently Director, Hazards Centre, Delhi)

  • Dr. Pyare Lal Garg, Chandigarh (Bharat Gyan Vigyan Samiti, Punjab);

  • Dr. Imrana Qadeer, Delhi (former professor, JNU; presently Distinguished professor, Council for Social Development, New Delhi)

  • Dr. S. P. Udayakumar, Nagercoil, TN (People's Movement Against Nuclear Energy)

  • Avik Saha, Delhi (Swaraj Abhiyan)

  • Prof. Roop Rekha Verma, Lucknow (Former Acting Vice Chancellor, Lucknow University; Secretary, Saajhi Duniya);

  • Neeraj Jain, Pune (Lokayat, Pune; Associate Editor, Janata Weekly, Mumbai)

  • Prof. Subhash Ware, Pune (S.M. Joshi Socialist Foundation, Pune);

  • Prof. R. Ramanujam, Chennai (Institute of Mathematical Sciences, Chennai; Tamil Nadu Science Forum);

  • Prof. Indranee Dutta, Guwahati (Professor, Cotton University, Guwahati);

  • Prof. V. Vasanthi Devi, Chennai (Former Vice-Chancellor, M. S. University, Tamilnadu; presently President, Movement to Save School Education, Tamilnadu)