Wealth is not income, so one can be wealthy without paying income tax.

Our liberal, socialist, secular brigade takes every chance to loudly condemn inequality in India. The top 10% holds 370 times the wealth of the poorest 10%. The top 1% holds 53% of the total wealth of the nation, the top 10% owns 76.3% and, conversely, the bottom 90% owns less than 25% of the country's wealth. We all agree that the figures are shameful. But, how do we improve the situation? India has been following socialist policies of reservations in education and government jobs and handouts under various schemes for 67 years and yet inequality is increasing. Inequality took off in 2000 and increased in a straight line under Congress rule till 2008 when the global economic crisis forced the government to stop throwing money around like confetti. Thomas Piketty is right when he says that too few people in India pay income tax. If 10% of people hold 73% of the country's wealth then 10% of 1.30 billion, that is 130 million people, should be paying income tax. But, in actuality only about 3% file income tax returns. There will certainly be some tax evasion but a lot of the blather is just mindless repetition. Most of the so called wealth of the top 10% is most certainly in real estate. The price of any 2 bedroom apartment in Delhi will not be less than Rs 10 million but the person living in it may have inherited it from his father and makes a living from a small grocery shop. So he is a millionaire, paying municipal taxes, but does not earn enough to pay income tax. Farmers are exempt from paying income tax, no matter how rich they are, and get free electricity in many states. This has not only made supply companies bankrupt and saddled state governments with trillions of rupees in debt but it is disastrous for the environment, as farmers deplete ground water by excessive use of water pumps. A study in the US suggests that inequality in that country may not be as severe as people think. People only look at income disparity when lifetime earnings are more important. For example, a retired person with a small income from savings is richer than a newly qualified graduate from IIT, with a student loan, but over the long term there is no comparison. Government schemes, such as MGNREGA, Right to Education and Right to Food, should also part of the calculation. Sadly the self-styled intellectuals in India just repeat what foreigners say and do not research what is actually the situation here. Meanwhile, the government is carrying on with myriad social schemes which may result in increasing fiscal deficit. As the government borrows more from the market bond yields will rise which will put a floor under interest paid by companies. After all, if banks can earn over 8% from sovereign bonds, which are totally safe, they will charge a hefty premium when lending to companies. Will the socialists stop their shrieks? Not a chance.