Redistribution of wealth: populist measure or attempt at appeasement?
- Trisha Rath
- May 4, 2024
- 2 min read
What is wealth redistribution?
Redistribution of wealth refers to the transfer of income and wealth from some individuals to others through various social mechanisms such as taxation, land reform, and monetary policies.
Why is it in the news?
Political leaders from the Indian National Congress (INC) and the Bharatiya Janata Party (BJP) have traded barbs at rallies regarding the topic of wealth redistribution. Quoting the INC’s intent to conduct socio-economic surveys to find out ‘who has how much wealth’, the BJP has accused the party of wanting to ‘give away’ the nation’s resources to particular communities.
Has wealth redistribution happened before in India?
The concept of wealth redistribution in India emerged during the first few decades after independence, when India followed a socialist economic model. Several land reforms were introduced that effectively capped the amount of private property individuals could possess; the government could limit the property owned by an individual, acquire the surplus, and redistribute it in equitable ways.
What are the constitutional frameworks governing such redistribution?
When the initial land reform acts were introduced, Right to Property was a fundamental right under article 19(1)(f). At the same time, article 39(b) of the Directive Principles of State Policy (DPSP) called for the state to ensure that ‘ownership and control of the material resources of the community are so distributed as best to sub-serve the common good’.
These clauses were seen as mutually contradictory, and resulted in drawn-out court battles.
Subsequently, article 19(1)(f) was amended to be excluded from the fundamental rights and to be included, instead, as a legal right under article 300(A).
The Supreme Court also called for the maintenance of a ‘harmonious balance’ between Fundamental Rights and DPSPs.
The court said that the DPSPs not being justiciable does not establish them as subordinate to the Fundamental Rights; and at the same time, the DPSPs being welfare objectives does not make them superior to Fundamental Rights.
What has the Supreme Court said about the matter?
Currently, the SC has instituted a 9-judge bench to deliberate upon the purview of ‘material resources’ as mentioned in article 39(b) – the most recent ruling of the bench has held that ‘to include every private resource as part of the material resource of the community will be far-fetched’. Meanwhile, deliberations continue on the interpretation of the DPSPs in a way that guarantees a reduction in economic inequality in the country.
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