According to a recent World Bank report, India has emerged as one of the world's most equal societies, surpassing the United States, China, and many G7 and G20 nations. India's Gini index, a measure of income distribution, stands at 25.5, placing it fourth globally behind only the Slovak Republic, Slovenia, and Belarus. This achievement signifies substantial progress in reducing poverty and promoting inclusive growth.
The Gini index ranges from 0 to 100, where 0 represents perfect equality and 100 signifies absolute inequality. India's score of 25.5 is significantly lower than China's 35.7 and the United States' 41.8, highlighting a more equitable distribution of income in India. This accomplishment is particularly noteworthy considering India's size and diversity.
Several factors have contributed to India's improved Gini index. A primary driver has been the government's consistent focus on poverty reduction through financial inclusion and direct welfare support. The World Bank's Spring 2025 Poverty and Equity Brief indicates that 171 million Indians have been lifted out of extreme poverty between 2011 and 2023. The share of people living below the global threshold for extreme poverty, defined as USD 2.15 per day until June 2025, has fallen from 16.2% in 2011-12 to 2.3% in 2022-23.
Key government initiatives have played a crucial role in achieving greater income equality. Programs such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), which has opened over 55 crore bank accounts, have boosted financial inclusion. The Aadhaar digital identity system, covering 142 crore people, facilitates direct benefit transfers (DBT), saving the government ₹3.48 lakh crore by March 2023. The Ayushman Bharat scheme provides free health coverage of ₹5 lakh for families, with over 41 crore health cards issued. Other initiatives like Stand-Up India and PM Vishwakarma Yojana support entrepreneurs from marginalized communities and artisans, respectively. The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) supports over 80 crore citizens with food security.
India's Gini index has seen a steady improvement, declining from 28.8 in 2011 to 25.5 in 2022. This progress reflects the impact of targeted policies aimed at bridging income gaps. While India's progress in reducing income inequality is commendable, some analysts suggest that the divide between the rich and poor is still a concern. A recent analysis by a financial analyst, Hardik Joshi, claims that income inequality in India is worse than it was under British colonial rule, with the top 1% holding 40.1% of India's wealth, while the bottom 50% own just 6.4%. However, the World Bank data paints a different picture, ranking India as one of the most equitable societies globally.
Despite these conflicting views, the World Bank's data suggests that India's focus on poverty reduction, financial inclusion, and welfare support has contributed to a more equitable distribution of income. As India continues its economic growth, maintaining this focus will be crucial for ensuring that the benefits of progress are shared across all sections of society.
