The Equality Illusion: Is India Really the 4th Most Equal Country?

By: Shreya Maheshwari Goel

The World Bank’s latest report has placed India’s Gini Index at 25.5, prompting government claims that the country ranks among the most equal in the world. But a closer look at the data reveals a different story- one where income and wealth inequality remain extremely high.

India has recently been described as the fourth most equal country in the world, a claim based on the World Bank’s April 2025 Poverty and Equity Brief. According to the brief, India’s Gini Index, which measures the degree of inequality, stands at 25.5. This figure places India behind only the Slovak Republic, Slovenia, and Belarus. The Gini Index ranges from 0 to 100, where 0 denotes perfect equality and 100 represents maximum inequality. India’s current figure places it in the “moderately low” inequality category, showing improvement from 28.8 in 2011–12.

This statistic has been widely cited by government agencies and sections of the media as evidence of India's growing equality. Compared to countries like China (Gini of 35.7) and the U.S. (41.8), India appears to have fared well. The government attributes this progress to various welfare schemes and targeted initiatives implemented over the past decade. These include financial inclusion through the Pradhan Mantri Jan Dhan Yojana, which has brought over 55 crore individuals into the banking system, and Aadhaar, India’s digital ID programme, now covering more than 142 crore people. Direct Benefit Transfers have reportedly saved ₹3.48 lakh crore by reducing leakages and ensuring efficient welfare delivery.

Healthcare schemes such as Ayushman Bharat, which provides up to ₹5 lakh in coverage per family and has issued over 41 crore health cards, are also cited as key contributors to equitable development. In addition, schemes like Stand-Up India and PM Vishwakarma Yojana have supported entrepreneurship among marginalised groups, while PMGKAY, the government’s food security programme, has reached over 80 crore citizens.

Alongside these developments, the World Bank report highlights a sharp reduction in extreme poverty. The share of the population living below the international poverty line of $2.15 a day fell from 16.2 percent in 2011–12 to just 2.3 percent in 2022–23. When assessed under the revised poverty line of $3.00 per day, the rate stands at 5.3 per cent. In total, around 171 million people in India were lifted out of extreme poverty between 2011 and 2023.

While these numbers are encouraging, the interpretation used by the government to declare India the fourth most equal country in the world is flawed. The Press Information Bureau (PIB) based this conclusion on India’s consumption-based Gini Index and directly compared it with other countries’ income-based Gini scores. This is a basic statistical error. Consumption inequality tends to appear lower than income inequality because higher-income groups save more and consume a smaller share of their earnings. As a result, comparing India’s consumption inequality with other countries’ income inequality is inaccurate and misleading.

Even the World Bank’s brief includes a cautionary note stating that India’s consumption inequality may be underestimated due to data limitations. It highlights methodological changes in the latest Household Consumption Expenditure Survey that make time-based comparisons difficult. The World Bank itself does not compare India’s Gini score with that of other countries, nor does it draw any ranking-based conclusions.

Wealth concentration in the country is stark: the top 1 percent of the population owns 40.1 percent of total wealth. Analysts such as Hardik Joshi have pointed out that India’s wealth and income disparities have reached levels worse than those seen during colonial times. He argues that the concentration of wealth is not accidental but a result of deliberate policy choices—tax structures that favor the rich, weak labor protections, and corporate monopolies that block fair market access for smaller players. Political financing and media narratives, he claims, help maintain the economic imbalance and stifle meaningful redistribution.

India’s welfare delivery system has certainly improved, and poverty has declined. However, the headline claim of being among the most equal countries globally is not supported by a full and accurate reading of the available data. It rests on a non-comparable and statistically unsound use of consumption inequality to make international claims that should be based on income or wealth Gini scores.

Opposition leaders have demanded a clarification from the Press Information Bureau and accused the government of misrepresenting the World Bank's data. The Congress party stated that not only was the data misread, but also manipulated by mixing metrics to suit a particular narrative. They argue that rather than addressing the deep structural issues behind inequality, the government appears more focused on creating a perception of fairness that doesn’t reflect the ground reality.

While India’s policies have made progress in financial access, healthcare, and food security, the structural gap between rich and poor remains wide. True equality requires more than just targeted schemes—it demands systemic changes, public investment in social sectors, and a fair regulatory environment that curbs monopolies.