Prosperity
Kaun Banega Crorepati?
The socio-economic landscape of India has significantly shifted in the past decade, with a growing middle class and female workforce participation.
More than 200,000 individuals in India have a taxable income of more than Rs. 1 crore. This number has increased fivefold compared to the last decade, and thousands of people have emerged as ‘crorepati’ taxpayers in the previous few years. Growth in the stock market, extensive profits in selected industries, increasing perks and privileges of talented people, and rigorous tax rules and regulations are some of the factors that amplify the number of crorepati taxpayers.
The tax department took active measures regarding data matching disclosures made by taxpayers in their investment returns. Through this step, it has become possible to track the transition of individuals to the crorepati-taxpayer bracket. The department detects any mismatch between reported earnings and taxes paid and takes prompt action accordingly. Moreover, simplifying IT forms and processes has helped establish an efficient, digitally driven filing and verification process that supports taxpayers in filing their returns.
During 2013-14, India had around 40,000 people with a taxable income of over one crore. However, extensive growth in this number was observed during the last two years, i.e., 2022-23 and 2023-24, when the number increased to 190,000 and 220,000, respectively. Overall, the maximum increase was observed from regions including Maharashtra, Uttar Pradesh, Gujarat, Rajasthan, and Tamil Nadu. Female tax filers account for 15% of the individual tax filers. Kerala, Tamil Nadu, Punjab, and West Bengal regions have more female tax filers than others.
The 2024 Hurun India Rich List shows that the country has 334 billionaires, an increase of 75 from the previous year. The country’s wealth distribution has become more widespread and less concentrated. The report stated that the number of towns on the rich list has risen from 10 at the inception of the list to 97 currently.
The industries seek talented people with relevant expertise and skills, especially in the AI-based tech sector, professional services, green energy, real estate, travel and hospitality startups. The benefits from the stock market are also evident, especially since senior executives have exploited this opportunity to increase their wealth. Besides, after COVID-19, the forced increase in corporate remuneration rose considerably as people left the industries, which compelled the enterprises to retain talented staff. Hence, large bonus payouts have aggravated the number of people with large sums of money entering the crorepati club.
The publicly available data of listed companies indicate that the number of executives earning salaries of more than Rs. 1 crore surged from 1,609 in 2019-2020 to 1,902 in 2022-23, showing an increase of around 18% during the last three years. Successful startup entrepreneurs and executives in selected enterprises and sectors also entered the crorepati bracket in the previous few years. During the pandemic, micro, small and medium-sized enterprises (MSMEs) faced considerable losses while the large enterprises gained additional market share and increased their footprints.
New rules of taxing dividends at the individual level instead of the corporate level have shifted various CEOs and senior executives into the Rs. 1 Crore tax category. The change in law increased the number of taxpayers from 190,000 in FY 2020-21 to 190,000 in 2021-22, showing a growth of 46% in only one year.
More than 200,000 individuals in India have a taxable income of more than Rs. 1 crore.
The rise in the number of crorepati taxpayers reflects the rising income inequality in India. Economists believe progress in this trend is likely to continue in the coming years based on sustained GDP growth and economic stability and the development of services sectors that are aligned with global standards and economic stability.
The trend reflects India’s growing middle class and high-income earners, expected to impact the economy significantly and drive increased consumer spending in retail, real estate, and tourism. Increased tax compliance will boost government revenues and public infrastructure, education, and healthcare investments. However, income inequality must be addressed for inclusive growth. This trend could strengthen India’s global economic powerhouse position.
India’s socio-economic landscape has significantly shifted in the past decade, with a growing middle class and female workforce participation. Initiatives to reduce income inequality have led to wealth generation across all strata, with over 300 billionaires and an ever-increasing representation of smaller towns on the rich list. These statistics demonstrate India’s resilience and potential for equitable economic progress.
The writer is Senior Research Associate at the Sustainable Development Policy Institute (SDPI). He can be reached at asifjaved@sdpi.org
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