wealth tax Current Affairs - 2020

Oxfam Annual Wealth Check report 2019: Key Facts

The Annual Wealth Check report 2019  of Oxfam has been released. The release of the report marked the start of the World Economic Forum in Davos. The important features of the report are:

  • 26 richest billionaires own as many assets as the 3.8 billion people who make up the poorest half of the world.
  • The rich had grown richer and the poor poorer in 2018.
  • The widening gap is hindering the fight against poverty.
  • The report estimates that a wealth tax of 1% would raise an estimated $418bn (£325bn) a year. This would be enough to educate every child not in school and provide healthcare that would prevent 3 million deaths.
  • The wealth of more than 2,200 billionaires across the globe had increased by $900 billion in 2018 i.e $2.5 billion a day.
  • The 12 per cent increase in the wealth of the very richest contrasted with a fall of 11 per cent in the wealth of the poorest half of the world’s population.
  • The wealth of the world’s richest man, Jeff Bezos, the owner of Amazon, saw an increase to $112 billion. Just 1 per cent of his fortune is equivalent to the whole health budget for Ethiopia
  • The number of billionaires has doubled during the last 10 years. A new billionaire was being created every two days in 2017-2018.

Facts about India

  • The top 1% of India’s richest lot got richer by 39% as against just 3% increase in the wealth for the bottom half of the population.
  • The wealth of the Indian billionaires witnessed an increase by Rs 2,200 crore a day last year.
  • 6 Crore Indians who make up the poorest 10 per cent of the country, continued to remain in debt since 2004.
  • Top 10% of the richest population in India holds 77.4% of the total national wealth.
  • The combined revenue and capital expenditure of the centre and states for medical, public health, sanitation and water supply is 2,08,166 crore, is less than the country’ richest man Mukesh Ambani’s wealth of Rs. 2.8 lakh crore.
  • In many countries including India, a decent education or quality healthcare has become a luxury only the rich can afford.
  • Children from poor families in India are three times more likely to die before their first birthday than children from rich families

The calculations and interpolations in the report were based on the data from the latest comprehensive data sources available publicly, including from the Credit Suisse Wealth Databook and the annual Forbes Billionaires.

RBI tweaks Gold Monetisation Scheme

The Reserve Bank of India (RBI) has made changes with the Gold Monetisation Scheme (GMS) to allow charitable institutions, central government entities and state government entities to deposit gold under GMS.

Now the entities allowed to deposit gold under the scheme include Resident Indians [Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations, Companies, charitable institutions, Central Government, State Government or any other entity owned by Central Government or State Government].

Why the ambit to deposit gold under the scheme was expanded?

The reasons for expanding the ambit are:

  • To bring out the unaccounted gold with the charitable institutions.
  • To enable the government agencies to deposit gold which they had confiscated.

Gold Monetisation Scheme

The Gold Monetisation Scheme was launched with the tagline Earn, while you secure. The scheme provides the dual benefit of, interest (denominated in gold) on the gold deposited and an option of encashing the gold at maturity. All the scheduled commercial banks except the RRBs are authorised to implement the scheme.

The gold deposits can be made under 3 term deposit plans:

  • Short term:1 to 3 years
  • Medium term:5 to 7 years
  • Long term:12 to 15 years

Short-term deposit rates are decided by the banks concerned, while the medium and long-term deposit interest rates are decided by the Central Government.

The minimum deposit one can make in a gold monetisation scheme is 30 grams of any purity and there is no maximum limit. The capital gains from the scheme are exempted from capital gains tax, wealth tax and income tax.