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The World Bank's recent report has positioned India as the fourth-most equal country in the world, a remarkable achievement reflecting significant progress in reducing inequality between 2011-12 and 2022-23. This recognition places India ahead of economic giants like the United States and China, underscoring the impact of various initiatives and schemes implemented over the past decade. The report highlights a substantial decrease in extreme poverty, a crucial factor contributing to India's improved standing on the Gini Index, a widely used measure of income and wealth distribution. While three countries – the Slovak Republic, Slovenia, and Belarus – boast better Gini Index scores, India's performance signifies notable strides towards greater social and economic equity. This essay will delve into the details of the World Bank report, examining the factors that have contributed to India's improved ranking, the implications of this achievement, and the challenges that remain in the pursuit of a more equitable society.
The Gini Index, a statistical measure of income or wealth inequality within a population, ranges from 0 to 100. A score of 0 represents perfect equality, where everyone has the same amount of income or wealth, while a score of 100 signifies complete inequality, where one individual possesses all the wealth. India's Gini Index stands at 25.5, placing it in the "moderately low" inequality category, alongside only 30 other countries worldwide. This category includes nations with strong welfare systems, such as Iceland, Norway, Finland, and Belgium, as well as fast-growing economies like Poland and wealthy nations like the United Arab Emirates. India's proximity to the "low inequality" group indicates that income and wealth are distributed relatively evenly compared to many other countries. In contrast, China's Gini Index is 35.7, and the United States' score is 41.8, highlighting the significant disparities in income and wealth distribution in these nations.
The World Bank report attributes India's reduction in inequality to various initiatives and schemes launched by the government over the past decade. These include programs aimed at financial inclusion, direct benefit transfers, and promoting entrepreneurship. The Pradhan Mantri Jan Dhan Yojana (PMJDY), a national mission for financial inclusion, has played a crucial role in providing access to banking services for millions of previously unbanked individuals. By bringing more people into the formal financial system, PMJDY has facilitated the direct transfer of government benefits, reducing leakage and ensuring that assistance reaches those who need it most. Direct Benefit Transfer (DBT) schemes have streamlined the delivery of various subsidies and welfare payments, eliminating intermediaries and improving efficiency. The Stand-Up India scheme encourages entrepreneurship among women and Scheduled Castes and Tribes, providing financial support and mentorship to help them start and grow their own businesses. These initiatives, along with others focused on education, healthcare, and rural development, have collectively contributed to a more equitable distribution of resources and opportunities.
The reduction in extreme poverty is a significant achievement that has further propelled India's progress toward greater equality. According to the World Bank report, 171 million Indians have been lifted out of extreme poverty over the last decade. The percentage of people living on less than USD 2.15 a day – the global line for extreme poverty until June 2025 – dropped significantly from 16.2% in 2011–12 to just 2.3% in 2022–23. This substantial decline in extreme poverty reflects the positive impact of economic growth and targeted interventions aimed at improving the living standards of the poorest segments of the population. While poverty reduction is not synonymous with equality, it is an essential component of creating a more just and equitable society. By ensuring that everyone has access to basic necessities and opportunities, India can further narrow the gap between the rich and the poor and promote greater social cohesion.
The steady improvement in India's Gini Index over the years is a testament to the country's commitment to inclusive growth. The index was 28.8 in 2011 and improved to 25.5 in 2022, indicating a consistent trend toward greater equality. This progress demonstrates that India has been able to combine economic growth with greater fairness and social equality, a critical factor for long-term sustainable development. However, challenges remain in the pursuit of a truly equitable society. While India has made significant strides in reducing extreme poverty and inequality, disparities persist across different regions, social groups, and genders. Addressing these disparities requires a multi-pronged approach that focuses on improving access to education, healthcare, and employment opportunities for marginalized communities. It also requires strengthening social safety nets and promoting policies that encourage inclusive growth and reduce income and wealth concentration.
One of the key challenges is ensuring that the benefits of economic growth are shared more equitably across all segments of society. While India has experienced rapid economic growth in recent decades, the benefits have not always been distributed evenly. The gap between the rich and the poor has widened in some areas, highlighting the need for policies that promote inclusive growth and reduce income inequality. This includes investing in education and skills development to ensure that everyone has the opportunity to participate in the modern economy. It also includes promoting policies that encourage entrepreneurship and innovation, creating new jobs and opportunities for all. Furthermore, strengthening social safety nets and providing targeted assistance to vulnerable populations can help to reduce poverty and inequality.
Another critical challenge is addressing regional disparities. India is a vast and diverse country, and there are significant differences in economic development and social indicators across different regions. Some states have made significant progress in reducing poverty and inequality, while others continue to lag behind. Addressing these regional disparities requires a targeted approach that takes into account the specific needs and challenges of each region. This includes investing in infrastructure, promoting economic development, and improving access to education and healthcare in lagging regions. It also requires strengthening local governance and empowering communities to participate in decision-making processes.
In addition to addressing regional disparities, it is also important to focus on gender equality. Women in India continue to face significant challenges in terms of access to education, healthcare, and employment opportunities. Addressing these challenges requires a multi-pronged approach that includes promoting girls' education, improving access to healthcare for women, and creating more opportunities for women to participate in the workforce. It also requires addressing social norms and attitudes that perpetuate gender inequality. Empowering women is not only the right thing to do, but it is also essential for achieving sustainable and inclusive development.
Finally, it is important to ensure that government policies are designed to promote equality and social justice. This includes policies related to taxation, social welfare, and labor laws. Progressive taxation policies can help to reduce income inequality by redistributing wealth from the rich to the poor. Social welfare programs, such as unemployment benefits and social security, can provide a safety net for vulnerable populations. And labor laws can protect workers' rights and ensure fair wages and working conditions. By implementing policies that promote equality and social justice, India can create a more just and equitable society for all.
In conclusion, the World Bank report's recognition of India as the fourth-most equal country in the world is a significant achievement that reflects the country's progress in reducing inequality and extreme poverty. However, challenges remain in the pursuit of a truly equitable society. Addressing regional disparities, promoting gender equality, and ensuring that government policies are designed to promote equality and social justice are all essential steps towards creating a more just and equitable India. By continuing to focus on inclusive growth and targeted interventions, India can further narrow the gap between the rich and the poor and create a society where everyone has the opportunity to thrive. The journey towards greater equality is an ongoing process, but India's progress to date is a testament to its commitment to building a more just and equitable future for all its citizens.
Source: India Becomes 4th 'Most Equal' Country In World, Leaves Behind US, China: World Bank Report