Despite its huge population and diversity, India is doing well to battle inequality, says World Bank data.
New Delhi: On 5 July 2025, the Press Information Bureau released a press release on India’s Story on Bridging Inequality. According to the press release, India is the fourth-largest economy in the world and one of the most equal societies.
The country’s Gini Index of 25.5 ranks it as the ‘fourth most equal country globally’.
This achievement is attributed to India’s focus on reducing poverty, expanding financial access, and providing welfare support to those in need. The economic progress in India is being shared more evenly across its population, despite its size and diversity, the report says.
Understanding the Gini Index
The Gini Index is a measure of income, wealth, or consumption distribution in a country, ranging from 0 to 100. A score of 0 indicates perfect equality, while a score of 100 represents absolute inequality.
A higher Gini Index signifies greater inequality in the country. The Gini Index can be explained graphically by the Lorenz curve, which shows the distribution of income among recipients.
A perfectly equal distribution is represented by a diagonal line, while the actual distribution is shown by the Lorenz curve. The Gini Index measures the gap between the Lorenz curve and a line of absolute equality, with a larger gap indicating greater income inequality. This provides a single number to indicate the fairness of income distribution.
India’s global standing in equality
According to the latest World Bank data, India has a Gini Index of 25.5, making it one of the most equal countries in the world. This score is lower than China’s and significantly lower than the United States’.
With a score of 35.7, China significantly outperformed India, while the United States scored even higher at 41.8. However, India is also more equal than every G7 and G20 country, despite being considered a developing economy.
India is classified as falling into the “moderately low” inequality category, with a Gini score between 25 and 30. The country is only a fraction away from joining the “low inequality” group, which includes nations like the Slovak Republic, Slovenia, and Belarus.
India’s Gini score is better than that of the other 167 countries for which the World Bank has released data.
Globally, there are only 30 countries that fall into the “moderately low” inequality category. This group includes European countries with strong welfare systems such as Iceland, Norway, Finland, and Belgium. It also features growing economies like Poland and wealthy nations like the United Arab Emirates.
India’s progress towards a more equal society can be seen in its Gini Index over the years. The index was 28.8 in 2011 and has decreased to 25.5 in 2022. This consistent improvement reflects India’s ability to combine economic growth with social equity.
Poverty reduction driving greater equality
India’s strong ranking on the Gini Index is attributed to its success in reducing poverty in both rural and urban areas. The World Bank’s Spring 2025 Poverty and Equity Brief highlights India’s achievement in lifting 171 million people out of extreme poverty over the past decade.
The percentage of people living on less than $2.15 a day decreased from 16.2 percent in 2011-12 to 2.3 percent in 2022-23. Adjusted to the World Bank’s revised extreme poverty threshold of $3.00 per day, the poverty rate for 2022-23 would be 5.3 percent.
Key government initiatives
India’s progress towards achieving greater income equality through targeted government initiatives/programmes aimed at improving financial access, delivering welfare benefits efficiently, and supporting vulnerable and underrepresented groups.
The government initiatives that have transformed India include the PM Jan Dhan Yojana, expanding financial inclusion, Aadhaar, covering over 142 crore individuals for welfare delivery, and Ayushman Bharat, providing health coverage to families.
The Stand-Up India scheme supports marginalised entrepreneurs, the PM Vishwakarma Yojana supports artisans, and PMGKAY benefits over 80 crore citizens through food security.
Their combined efforts have bridged divides, improved lives, and fostered inclusive growth.
Conclusion
A Gini coefficient of 25.5 shows that India has made considerable progress in reducing income inequality, leading to tangible improvements in the lives of its citizens.
Economic reforms and social initiatives (like DBT, Jan Dhan, etc) have contributed to this success. India shines as an example and shows how, with good policy and inclusiveness, equality and growth may be pursued together.
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