Abhijit Banerjee bats for wealth tax to combat inequality

Our Bureau | | Updated on: Jan 28, 2020

Abhijit Banerjee

Nobel laureate and economist, Abhijit V Banerjee, on Monday, called for re-introduction of a wealth tax in India considering the rising “inequality”.

“Given the amount of inequality now, a wealth tax is completely sensible. And more redistribution is required,” he said while speaking at a literary meet here. He, however, does not expect the levy/reintroduction of wealth tax “immediately”.

India did have a wealth tax, The Wealth Tax Act 1957, which was subsequently discontinued in 2016.

According to Banerjee, “Budget deficits are a known lie” and they are not what one claims it to be.

A critic of the recent corporate tax cuts by the Centre, Banerjee reiterated that it has not achieved its desired results especially when it comes to “generating demand”. The economist instead called for refinancing of the banking sector as a priority area. “At this point, funding money to refinance the banking sector and improve infrastructure should be the two main focus (areas) of the government,” he added.

The Nobel laureate also recommended the Centre’s disinvestment drive, especially that of Air India.

Published on January 27, 2020
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