Gini Index: World Bank Report

Context:

A recent World Bank report ranked India among the most equal countries globally based on its Gini index for 2022–23, pegged at 25.5—placing it fourth after the Slovak Republic, Slovenia, and Belarus. However, economists and policy experts have raised serious concerns about data limitations, sampling flaws, and methodological choices that may understate inequality in the country.

What Is the Gini Index?

• A statistical measure of inequality, ranging from 0 (perfect equality) to 100 (absolute inequality).
• The World Bank report used consumption expenditure data to calculate the Gini index for India.

Key Highlights:

• Gini Index Score:
  • India’s Gini Index (2022–23): 25.5
  • Global Rank: 4th most equal country
  • Countries with better Gini scores:
    1. Slovak Republic
    2. Slovenia
    3. Belarus
• Understanding the Gini Index:
  • Measures income or consumption inequality on a scale from 0 to 100.
  • 0 = Perfect equality, 100 = Absolute inequality (one person has all the income/wealth).
  • India’s score places it in the “moderately low inequality” category (25–30 range).
• Comparative Scores:
  • China: 35.7
  • United States: 41.8
  • UK: 32.4
  • India is close to entering the “low inequality” category (<25).
• Decline in Extreme Poverty:
  • Dropped from 16.2% in 2011–12 to 2.3% in 2022–23
  • Indicates broad-based improvement in living standards across income groups.
• Government Attribution:
  • India’s progress credited to:
    • Welfare schemes and pro-poor policies
    • Expansion of financial inclusion, digital infrastructure, and social safety nets

Decline in Extreme Poverty

• 171 million Indians exited extreme poverty between 2011 and 2023.
• The share of people living on less than $2.15/day dropped from 16.2% (2011–12) to just 2.3% in 2022–23.
• Under the revised World Bank threshold of $3/day, the extreme poverty rate for India is 5.3%.

Drivers of India’s Improved Equality

The steady decline in inequality is attributed to targeted government initiatives that expanded financial inclusion, direct benefit transfers, healthcare access, and rural empowerment. Key programmes include:

• PM Jan Dhan Yojana: Over 55 crore bank accounts opened.
• Aadhaar and DBT: Enabled real-time, targeted welfare delivery, saving ₹3.48 lakh crore.
• Ayushman Bharat: Over 41 crore health cards issued with ₹5 lakh coverage.
• Stand-Up India: ₹62,807 crore sanctioned to SC/ST and women entrepreneurs.
• PMGKAY: Food grains distributed to 80 crore beneficiaries.
• PM Vishwakarma Yojana: Nearly 30 lakh artisans registered for credit and training.

TH, BS & TET