India Ranks 4th among the World’s Most Equal Societies

Syllabus: GS3/Economic Development

Context

• According to the World Bank, India’s Gini Index stands at 25.5, making it the fourth most equal country in the world.

Major Highlights

• India was placed after the Slovak Republic, Slovenia and Belarus.
  • India’s score is much lower than China’s 35.7 and far lower than the United States, which stands at 41.8.
• India falls into the “moderately low” inequality category, which includes Gini scores between 25 and 30.
• India has a better score than all of the other 167 countries for which the World Bank has released data.

• Poverty Reduction: Extreme poverty dropped to 2.3% in 2022-23.
  • 171 million Indians moved out of extreme poverty between 2011–23.

Gini Index

• The Gini Index shows how equally income, wealth or consumption is distributed across households or individuals in a country. 
• It ranges in value from 0 to 100. A score of 0 means perfect equality and a score of 100 means absolute inequality.
  • The higher the Gini Index the more unequal the country.
• Lorenz Curve: Graphically Gini Index can be explained by the Lorenz curve.
  • A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. 
  • A perfectly equal distribution will be shown by a diagonal line, while the actual distribution will be shown by the Lorenz curve.  
  • The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality.
  • The bigger the gap, the more unequal the income.

Key Government Initiatives

• PM Jan Dhan Yojana: In 2025 over 55.69 crore people will hold Jan Dhan accounts, giving them direct access to government benefits and formal banking services.
• Aadhaar and Digital Identity: This system forms the backbone of welfare delivery by ensuring that benefits reach the right person at the right time through reliable authentication.
• Direct Benefit Transfer (DBT): The DBT system has streamlined welfare payments, reducing leakages and delays.
• Ayushman Bharat: The scheme provides health coverage of up to ₹5 lakh per family per year.
  • The government launched the Ayushman Vay Vandana scheme to extend this coverage to all citizens aged 70 and above, regardless of income.
  • The Ayushman Bharat Digital Mission has further strengthened this effort, with over 79 crore health accounts created to link individuals to digital health services.
• Stand-Up India: To promote inclusive entrepreneurship, the Stand-Up India scheme provides loans between ₹10 lakh and ₹1 crore to SC/ST and women entrepreneurs for setting up greenfield enterprises.
  • This initiative empowers individuals from disadvantaged communities to participate in economic growth on their own terms.               
• Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY): Launched during the COVID-19 pandemic, PMGKAY has continued to serve the most vulnerable sections of society. 
• PM Vishwakarma Yojana: Traditional artisans and craftspeople are vital to India’s economic and cultural fabric, the scheme supports them with collateral-free loans, toolkits, digital training, and marketing support.

Conclusion

• India’s path to income equality has been steady and focused. The Gini Index of 25.5 reflects real change in people’s lives.
• As the world looks for models that combine growth with fairness, India’s example stands out. 
• Its experience shows that equality and development are not separate goals. 

Source: AIR