The Broken Foundation · Chapter Six
India's top 1% own 40% of national wealth. Its tax-to-GDP ratio is 11% — one of the lowest in the world. Its richest citizens pay less tax as a share of income than its salaried middle class. These are not accidents of development. They are the signature of a tax system designed by people who benefit from its failures.
| Indicator | Figure | Source |
|---|---|---|
| Top 1% share of national wealth | 40.1% | Oxfam 2024 |
| Bottom 50% share of national wealth | 6.4% | Oxfam 2024 |
| Tax-to-GDP ratio | 11% (Germany: 37%, Sweden: 42%) | OECD Tax 2023 |
| Annual revenue lost to 2019 corporate tax cut | ₹1.45 lakh crore | MOF Economic Survey 2024 |
| Informal workforce | 93% | PLFS 2023 |
| e-Shram registered informal workers | 29 crore+ | e-Shram 2024 |
| GST slabs | 5 (0%, 5%, 12%, 18%, 28%) | GST Council |
| Country | Model | Key Lesson |
|---|---|---|
| Norway | State as shareholder via sovereign wealth fund | PSU returns build generational wealth |
| Singapore Temasek | Professional public ownership | State ownership compatible with excellence |
| France | Wealth tax on net financial assets | Evasion-resistant design matters |
| South Korea | Graduated formalisation incentives | Make formality cheap, not just compulsory |
01 · GST Rationalisation — Three Slabs
Collapse 5 slabs to 3: zero (essentials), 10% (standard), 18% (luxury). Digital compliance under 30 minutes. 90-day GST Tribunal. Low-income compensation through direct transfers.
02 · Multi-Source Revenue Strategy — Tax-GDP to 16% Over 10 Years
Wealth tax: 0.5–1.5% on net wealth above ₹10 crore including financial assets.
Inheritance tax: exempt below ₹5 crore, progressive 10–45% above.
Capital gains rationalised. Corporate loophole closure. NPA recovery through faster IBC.
03 · Anti-Crony Capitalism Framework
PSU disinvestment above ₹500 crore requires parliamentary approval and independent CAG valuation. Conflict of interest registry. Competition Commission strengthened with suo motu powers. Cross-sector ownership caps.
04 · National Social Security Fund — Protecting the 93%