India in Top Rankers in Terms of Income Equality, better than G7 and G20 nations

India has emerged as one of the most income-equal societies globally. It secured the fourth spot in the latest World Bank rankings with a Gini Index of 25.5.

India’s score is better than that of major economies like China(35.7), the United States (41.8), and all G7 and G20 countries. 

What is the Gini Index?

The Gini Index is a widely used measure of income distribution. A score of 0 indicates perfect equality. A score of 100 reflects maximum inequality. A score of 0 would mean every person of the population earns the same.

This also reflects equitable growth, which is economic growth where the benefits are distributed fairly across all segments of society. If there is parity of income, people will enjoy similar benefits in the society.

Equitable growth is a goal of every economy. It is also included in the 10th SDG – reduced inequalities.

The lower the Gini number, the more evenly income is distributed, i.e., the lesser the gap between the rich and the poor. India’s current score of 25.5 marks a significant improvement from 28.8 in 2011. This reflects progress towards equitable growth or equal standard of living for all.

The Ministry of Social Welfare said, “This reflects how India’s economic progress is being shared more evenly across its population. Behind this success is a consistent policy focus. The focus is on reducing poverty, expanding financial access, and delivering welfare support directly to those who need it most.”

India’s Gini score now places it ahead of many advanced and emerging economies, including China (35.7), the United States (41.8), and all G7 and G20 nations, according to the World Bank data.

Reduction in Poverty

A cause for greater income equality is reduction in poverty. The World Bank’s Spring 2025 Poverty and Equity Brief reports on significant changes. It states that 171 million Indians were lifted out of extreme poverty between 2011 and 2023. Extreme poverty is generally defined as living on less than $2.15 or ₹184 per day (as of 2022), according to the World Bank.

Poverty rate, which is the ratio of the population whose income falls below the poverty line, has also declined. The poverty rate fell sharply from 16.2 per cent to just 2.3 per cent between 2011 and 2023.

Factors Contributing to Improvement

This constant improvement in distribution of economic benefits is due to consistent and targeted efforts.

According to a release from the Ministry of Social Welfare, flagship programs like:

• PM Jan Dhan Yojana aims to expand affordable access to financial services. These services include bank accounts, remittances, credit, insurance, and pensions. It has expanded financial inclusion, with over 55 crore bank accounts.
• Aadhaar, India’s digital ID system, now covers more than 142 crore individuals. It streamlines welfare delivery through Direct Benefit Transfers. This approach saved Rs 3.48 lakh crore by March 2023.
• DBT aims to transfer government benefits and subsidies directly to the bank accounts of eligible beneficiaries. This reduces human intervention. It also minimizes fraud.
• Healthcare equity has also improved through Ayushman Bharat. This program provides Rs 5 lakh health coverage to families. It has issued over 41 crore cards. Ayushman Bharat is a national public health insurance scheme of the Government of India. It aims to provide free access to health insurance coverage for low income earners in the country.
• The Stand-Up India scheme supports SC/ST and women entrepreneurs, while the PM Vishwakarma Yojana backs artisans with loans and training.
• PMGKAY, India’s food security scheme has benefited over 80 crore citizens.

Hence, a combination of financial inclusion, social welfare schemes, and accessible digital infrastructure has contributed to India’s improved performance. These factors help India perform better across these growth markers.

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