India Beats G7 Nations in Equality — Here’s How It Happened!

According to the World Bank’s 2025 report, India is now the 4th most equal country globally, with a Gini Index of 25.5. This places India ahead of nations like the United States (41.8) and China (35.7) in terms of income equality. The achievement comes alongside India being the world’s fourth-largest economy, showcasing how inclusive growth and social welfare schemes have helped narrow inequalities.

Understanding the Gini Index

• About: The Gini Index (or Gini coefficient) was developed in 1912 by Corrado Gini, an Italian statistician.
• What It Measures: It measures income inequality within a population.

Range

• 0 (Perfect Equality): Everyone earns the same.
• 1 (Perfect Inequality): One person earns everything.
• When shown as a percentage, the range is 0–100.

India’s Current Status

• 2011: 28.8
• 2022: 25.5 (a significant decline)
• Category: India now falls into the “moderately low inequality” group (25–30 range).
• Significance: India’s progress challenges the old assumption that it is a highly unequal society, highlighting broad-based income growth, especially among the lower-income brackets.

What Drove India’s Equity Success?

Poverty Reduction

• As per the World Bank’s Spring 2025 Poverty and Equity Brief, 171 million Indians have been lifted out of extreme poverty since 2011.
• The poverty threshold was raised from USD 2.15/day to USD 3/day to adjust for inflation.
• At this benchmark, India’s extreme poverty rate dropped from 27.1% in 2011–12 to 5.3% in 2022–23.
• Number of poor reduced from 344.47 million to 75.24 million.

Social Welfare Schemes and Digital Reforms

• PM Jan Dhan Yojana: Over 55.69 crore accounts opened, ensuring financial inclusion and access to government benefits.
• Aadhaar & Digital Identity: More than 142 crore Aadhaar cards issued, providing secure authentication for welfare delivery.
• Direct Benefit Transfer (DBT): Saved ₹3.48 lakh crore by reducing leakages and ensuring efficient delivery.
• Ayushman Bharat & Digital Health Mission: 41.34 crore Ayushman Cards issued & 79 crore digital health accounts created, providing ₹5 lakh health coverage per family.
• Stand-Up India: Sanctioned 2.75 lakh applications worth ₹62,807 crore, encouraging entrepreneurship among marginalized communities.
• Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY): Reached 80.67 crore beneficiaries with free food grains.
• PM Vishwakarma Yojana: Registered 29.95 lakh artisans, providing loans, training, and digital support.

Challenges and Concerns Despite Equality Gains

Persistent Poverty

• At the USD 3.65/day poverty line (for lower-middle-income nations), 28.1% of India’s population remains poor (over 300 million people).
• This questions the sustainability of equality claims.

Income and Wealth Inequality

• Top 10% earn 13 times more than the bottom 10%.
• Richest 1% control over 40% of national wealth, while bottom 50% own just 3%.
• Historical Trend: Gini coefficient for income rose from 0.371 in 1955 to 0.410 in 2023.

Outdated Poverty Line

• India still uses the Rangarajan Committee’s 2014 poverty line, which doesn’t reflect today’s cost of living.
• Without revision, welfare schemes may miss targeting the truly poor.

Unequal Access to Opportunities

• Gaps continue in education, healthcare, digital access, and employment.
• Rural areas, women, SCs/STs, and informal workers remain at a disadvantage.
• Equality of opportunity is still a challenge, despite improvements in consumption-based equality.