India Becomes Fourth-Most Equal Country Amid Decline in Poverty

Description

Between 2011-12 and 2022-23, India has made significant strides in lowering income inequality, earning it the position of the fourth-most equal country in the world according to the World Bank’s Gini Index. This achievement is closely linked to a dramatic fall in extreme poverty levels, which experts attribute to a mix of social welfare programmes and inclusive economic policies.

Understanding Gini Index

The Gini Index is a statistical measure used to evaluate income or wealth inequality within a population. It ranges from 0 (perfect equality) to 100 (complete inequality). India’s index score has improved from 28.8 in 2011 to 25.5 in 2023, moving the country into the moderately low inequality bracket. Only a few nations such as Slovakia, Slovenia, and Belarus have slightly more equitable distributions. In contrast, countries like China (35.7), the US (41.8), and the UK have significantly higher inequality.

Sharp Decline In Extreme Poverty

Over the past decade, extreme poverty in India has fallen dramatically. The share of the population living below the international poverty line of USD 2.15 per day declined from 16.2% in 2011-12 to just 2.3% in 2022-23. This translates into nearly 171 million people rising above the poverty threshold. The revision of the poverty line to USD 2.15 in June 2025 accounts for inflation and changes in the global cost of living.

Government Welfare Schemes Driving Equity

The reduction in poverty and inequality is largely driven by government-led initiatives. Programmes such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), Direct Benefit Transfer (DBT), and Stand-Up India have enhanced financial inclusion and ensured direct delivery of welfare benefits to underserved populations. These schemes have enabled greater access to basic services, uplifted marginalised groups, and reduced income disparity.

India In Global Inequality Landscape

India now belongs to a group of 30 nations with moderate to low inequality, sharing space with countries like Iceland, Norway, Belgium, and emerging economies like Poland. The progress highlights India’s ability to maintain economic growth while advancing social equity.

Societal And Economic Implications

This shift in income distribution means that more citizens now have access to essential services such as banking, healthcare, nutrition, and employment opportunities. The improvement in India’s Gini score reflects tangible gains in living standards and economic inclusion. These developments are vital for ensuring social cohesion, sustainable growth, and long-term national prosperity.

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