India Among the World’s Most Equal Societies: Insights from the Latest World Bank Report

India has achieved a remarkable milestone in its ongoing development journey. According to the World Bank’s Spring 2025 Poverty and Equity Brief, India now ranks as the fourth most income-equal country globally, boasting a Gini Index of 25.5. This notable ranking places India just behind Slovakia, Slovenia, and Belarus, and significantly ahead of economic powerhouses like China and the United States. This achievement reflects years of sustained efforts in poverty alleviation, financial inclusion, and social welfare.

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Understanding India’s Progress in Income Equality

The Gini Index is a widely used measure of income inequality within a country. A lower Gini Index indicates a more equal distribution of income among the population. Over the past decade, India’s Gini coefficient has steadily declined from 28.8 in 2011 to 25.5 in 2022-23, signaling a positive shift towards greater economic equity.

This progress is further underscored by India’s dramatic reduction in extreme poverty. Between 2011 and 2023, an estimated 171 million Indians were lifted out of poverty measured at the $2.15 per day threshold. The national poverty rate plunged from 16.2% to just 2.3%. Notably, rural areas experienced a steep decline from 18.4% to 2.8%, while urban poverty dropped from 10.7% to 1.1%. When considering a slightly higher poverty line of $3 per day, the number of people escaping poverty rises to 378 million, reducing the poverty rate from 61.8% to 28.1%.

These figures illustrate a broad-based improvement in living standards across the country, with both rural and urban populations benefiting significantly from economic growth.

Government Policies Fueling the Shift

India’s progress towards income equality is the result of a multifaceted policy approach. The government has focused heavily on expanding financial inclusion, improving social welfare delivery, and ensuring that benefits reach the intended recipients efficiently.

Financial inclusion has seen unprecedented growth with the opening of over 550 million bank accounts under the Pradhan Mantri Jan Dhan Yojana, enabling millions of Indians to access formal banking services for the first time. This financial outreach has been complemented by the Aadhaar biometric ID system, now covering 1.42 billion people, which has streamlined direct benefit transfers, significantly reducing leakages and saving the government an estimated ₹3.48 lakh crore.

Healthcare has also been a key priority, with the Ayushman Bharat scheme providing health insurance coverage of up to ₹5 lakh per family. Over 410 million beneficiary cards have been issued, extending access to critical medical services.

In addition, targeted schemes like Stand-Up India and the PM Vishwakarma Yojana have empowered marginalized communities, including Scheduled Castes, Scheduled Tribes, women entrepreneurs, and traditional artisans by facilitating access to credit, skill development, and mentoring. Meanwhile, food security programs like the Pradhan Mantri Garib Kalyan Anna Yojana have ensured essential rations reach over 800 million citizens during times of need.

Rural employment schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have also played a vital role in providing income security and stabilizing rural economies.

Challenges and the Road Ahead

Despite these encouraging developments, India continues to grapple with deep-rooted structural inequalities. Wealth distribution remains skewed, with the richest 1% holding more than 40% of the country’s wealth, while the bottom half of the population owns a mere 3%. Such disparities indicate that while income inequality has improved, wealth inequality remains a significant challenge.

Gender inequality also persists. Women’s labor force participation is low, and the gender pay gap remains wide—women on average earn approximately 63% of what men earn. Women continue to shoulder a disproportionate burden of unpaid domestic work, estimated to be nearly ten times that of men, impacting their economic participation and empowerment.

Health and nutrition also require focused attention. Despite progress, over one in three children under the age of five suffer from undernutrition, which has long-term implications for the country’s human capital development.

Conclusion: A Story of Progress and Promise

India’s position as one of the world’s most equal societies, as reflected in its low Gini Index and dramatic poverty reduction, represents a significant success story. It underscores the impact of targeted policies, welfare schemes, and the government’s focus on inclusive growth. These gains are not just statistics—they translate into improved quality of life for millions of Indians, both in cities and villages.

However, India’s journey towards true equality is far from complete. Persistent wealth concentration, gender disparities, and health challenges remind us that continuous efforts and innovative policies will be essential to build on this foundation. By addressing these issues head-on, India can ensure that its economic growth benefits all citizens, fostering a more just and equitable society for generations to come.

(Sources: LiveMint, Business Today, Money Control)