Considering the current stage of inequality in the country, it is time for India to reintroduce wealth tax in the Union Budget 2020 and also focus on redistribution of wealth, the Nobel laureate, Prof. Abhijit V Banerjee ,said on Monday.
'Given the amount of inequality now, wealth tax is completely sensible and more redistribution is required,' he said at the Tata Steel Kolkata Literary Meet.
India had passed the Wealth Tax Act, 1957 which was levied on an individual, a Hindu Undivided Family and a Corporate entity on its valuation, which was repealed in April 2016.
However, Prof. Banerjee remained skeptical about the current government's enthusiasm to introduce it.
Responding to a question about his views on the Centre's disinvestment drive, he said, 'I would love to sell out the prestigious PSUs.'
The 58-year old economist said that corporate tax cut hasn’t yielded the desired results and corporate India is sitting on a pile of cash. Instead, he stressed the need to refinance the banking sector and give a boost to the infrastructure segment.
Prof. Banerjee, however, said that refinancing the banking sector will not yield results in the near future, rather will take time.
Speaking on government programmes, he said that the Centre has undertaken 'very expensive new schemes' like Ayushmann Bharat which once 'properly implemented' will address some key welfare issues. Other schemes like Ujjwala and Swachh Bharat are also 'costly' according to him.
Asked about his viewpoint on migration in light of the ongoing protests around CAA and NRC, he said that migration is better for the economy as migrants put in their best to compete with the local population.
He reasoned that migration is the result of either civil wars as in the case of West Asia or an economic catastrophe seen in the case of Greece from where around 50,000-60,000 people migrated elsewhere.