Capital and the Hindu Rate of Growth: Top Indian Wealth Holders 1961-1986

Abstract

Did India's stagnant growth performance until the 1980s increase or decrease the wealth of the elite? Using estate tax data I compute a series which highlights the relative importance of top wealth holders in India between 1961-1986. I find that a combination of policies and shocks were able to significantly depress the personal wealth of the Top 0.1% over this period. A portfolio decomposition by asset categories for the rich reveals that there was a U shaped trend in the average value of movable assets while wealth invested in land significantly declined. Disparity within top wealth groups also follows a shrinking and swelling, consistent with the intervention of the state in private capital. These results have implications for the equalizing forces inherent in tax policy vis-a-vis the rich and the role of the state in regulating capital in poor nations.