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The World Bank report, released in July 2025, positions India as the fourth most equal country in the world, a remarkable achievement driven by a substantial decrease in inequality between 2011-12 and 2022-23. This improvement is coupled with a significant reduction in extreme poverty, which plummeted from 16.2% in 2011-12 to a mere 2.3% in 2022-23. The report’s findings are based on the Gini Index, a widely recognized measure of income and wealth distribution. A lower Gini Index indicates a more equitable distribution, with 0 representing perfect equality and 100 representing complete inequality. India’s Gini Index stands at 25.5, placing it ahead of countries like the United States (41.8) and China (35.7). Only the Slovak Republic, Slovenia, and Belarus boast lower Gini Index scores, making them the three most equal countries according to this metric. The report, which encompasses data from 167 countries, categorizes India in the “moderately low” inequality group (Gini scores between 25 and 30), highlighting the country's progress towards a more egalitarian society. The World Bank's analysis underscores the impact of various government initiatives and schemes implemented over the past decade. These policies have demonstrably contributed to reducing inequality and lifting millions out of extreme poverty. Specifically, the report credits schemes like the PM Jan Dhan Yojana, Direct Benefit Transfer (DBT), and Stand-Up India for playing a key role in promoting income equality. The PM Jan Dhan Yojana, a national mission for financial inclusion, has provided millions of previously unbanked individuals with access to banking services, enabling them to participate more fully in the formal economy. Direct Benefit Transfer (DBT) has streamlined the delivery of welfare benefits, ensuring that funds reach intended recipients directly, thereby reducing leakages and corruption. Stand-Up India promotes entrepreneurship among women and Scheduled Castes and Tribes, providing them with access to financing and mentorship to start their own businesses. This initiative helps to address historical inequalities and promote economic empowerment among marginalized communities. The World Bank report estimates that 171 million Indians have been lifted out of extreme poverty in the last decade. This remarkable achievement reflects the combined impact of economic growth and targeted social programs. While India's progress is commendable, the report also acknowledges the ongoing challenges in addressing inequality. The country's Gini Index, while significantly improved, remains above the threshold for the “low inequality” group. Further efforts are needed to consolidate these gains and ensure that the benefits of economic growth are shared more equitably across all segments of society. The report's findings have significant implications for policymakers, researchers, and development practitioners. It provides valuable insights into the drivers of inequality and the effectiveness of different policy interventions. It also underscores the importance of continued monitoring and evaluation to track progress and identify areas where further action is needed. India's success in reducing inequality and poverty can serve as a model for other developing countries striving to achieve more inclusive and sustainable development. The country's experience demonstrates that it is possible to combine economic growth with greater social equity, provided there is a strong commitment to inclusive policies and effective implementation. The World Bank report is a timely reminder of the importance of addressing inequality as a key priority for sustainable development. Inequality not only undermines social cohesion and economic stability, but it also hinders progress towards achieving other Sustainable Development Goals, such as reducing poverty, improving health, and promoting education. By reducing inequality, countries can unlock the full potential of their citizens and create more prosperous and equitable societies.
The data presented in the World Bank report paints a positive picture of India's socio-economic progress. The reduction in extreme poverty and the improvement in the Gini Index are significant achievements that reflect the government's commitment to inclusive growth. However, it is important to note that the Gini Index, while a useful measure of inequality, has certain limitations. It captures only income or wealth inequality and does not take into account other dimensions of inequality, such as access to education, healthcare, and other essential services. Furthermore, the Gini Index is a static measure that does not capture the dynamics of inequality over time. It is therefore important to supplement the Gini Index with other indicators to gain a more comprehensive understanding of the nature and extent of inequality in India. The World Bank report acknowledges these limitations and calls for further research to explore the complex drivers of inequality in India. It also emphasizes the importance of adopting a multi-dimensional approach to addressing inequality, which takes into account not only income and wealth but also other factors such as gender, caste, and geographic location. The report highlights the importance of investing in human capital, promoting inclusive growth, and strengthening social protection systems to reduce inequality and poverty. It also emphasizes the role of good governance and effective institutions in ensuring that the benefits of economic growth are shared more equitably. The World Bank report's findings are consistent with other studies that have documented a decline in poverty and inequality in India in recent years. However, some researchers have questioned the accuracy of the data used in these studies. They argue that the official poverty estimates may underestimate the true extent of poverty in India due to methodological limitations. They also point to evidence of rising inequality in certain segments of the population, such as among informal sector workers and rural households. These concerns highlight the need for continued vigilance and robust data collection to ensure that progress in reducing poverty and inequality is accurately measured and effectively targeted. The World Bank report serves as a valuable contribution to the ongoing debate about poverty and inequality in India. It provides a comprehensive overview of the latest trends and challenges and offers practical recommendations for policymakers. The report's findings should be used to inform policy decisions and guide future research efforts. It is crucial to ensure that India's economic growth continues to be inclusive and sustainable, so that all citizens can benefit from the country's progress.
The comparison to other countries in the World Bank report provides valuable context for understanding India's progress. While India's Gini Index of 25.5 is significantly better than that of the United States (41.8) and China (35.7), it is important to note that these countries have very different socio-economic structures and levels of development. The United States, for example, has a highly developed market economy with a large private sector and a relatively weak social safety net. This contributes to higher levels of income inequality compared to countries with stronger welfare states. China, on the other hand, has a rapidly growing economy with a large state-owned sector and a complex mix of market and socialist principles. Its high Gini Index reflects the growing disparities between urban and rural areas and between different regions of the country. The Slovak Republic, Slovenia, and Belarus, which have lower Gini Index scores than India, are all relatively small European countries with strong welfare systems. These countries have historically had lower levels of income inequality compared to other parts of the world. India's progress in reducing inequality is particularly remarkable given its large population size, diverse socio-economic structure, and relatively low level of development. The country's success demonstrates that it is possible to achieve significant progress in reducing inequality even in challenging circumstances. However, it is important to avoid complacency and to continue to strive for further improvements. India's Gini Index is still higher than that of many other developing countries, such as Brazil and South Africa, which have historically had high levels of inequality. Further efforts are needed to address the root causes of inequality in India, such as unequal access to education, healthcare, and other essential services. The government's commitment to inclusive growth and social justice is crucial for ensuring that the benefits of economic development are shared more equitably across all segments of society. The World Bank report provides a valuable benchmark for measuring India's progress in reducing inequality. It also highlights the importance of international comparisons for understanding the challenges and opportunities facing different countries. By learning from the experiences of other countries, India can continue to refine its policies and programs and accelerate its progress towards a more equitable and prosperous society. The report's findings should be widely disseminated and used to inform public debate about inequality in India. It is crucial to raise awareness about the issue and to engage all stakeholders in the effort to reduce inequality and promote social justice.
Source: India Becomes 4th 'Most Equal' Country In World, Leaves Behind US, China: World Bank Report