In a landmark achievement, India’s income equality has reached historic levels, placing the nation fourth worldwide in the latest World Bank rankings. According to the report, India recorded a Gini Index of 25.5—its best score to date—surpassing many developed and developing economies. The country now trails only the Slovak Republic, Slovenia, and Belarus in terms of equitable income distribution.
The Gini Index, a universally recognized metric of income inequality, ranges from 0 (perfect equality) to 100 (maximum inequality). India’s 2025 score marks a striking improvement from 28.8 in 2011. This trajectory underscores a sustained and effective policy framework aimed at promoting balanced growth and reducing socio-economic disparities.
“This reflects how India’s economic progress is being shared more evenly across its population,” the Ministry of Social Welfare said in an official statement. “Behind this success is a consistent policy focus on reducing poverty, expanding financial access, and delivering welfare support directly to those who need it most.”
Income Equality: A Remarkable Shift in Economic Equity
India’s ascent in income equality comes as a surprise to many analysts, given its vast and diverse population. Yet, the numbers tell a compelling story. The World Bank’s Spring 2025 Poverty and Equity Brief reveals that 171 million Indians were lifted out of extreme poverty between 2011 and 2023.
During this period, India’s poverty rate plunged from 16.2% to just 2.3%, based on the global threshold of USD 2.15 per day.
This steep decline in poverty has been a key driver of the country’s improved Gini score. It also signals a broader shift in how India distributes its economic gains—a move from concentrated wealth toward inclusive growth.
Policies Fueling India’s Income Equality
A range of transformative government initiatives have been instrumental in reshaping the income landscape:
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PM Jan Dhan Yojana has brought over 55 crore citizens into the formal banking system, enhancing savings and access to credit.
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Aadhaar, India’s digital ID covering 142 crore individuals, has revolutionized welfare targeting and enabled Direct Benefit Transfers (DBT). These DBTs alone have saved the country a staggering Rs 3.48 lakh crore by March 2023 through reduced leakages and fraud.
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Ayushman Bharat, offering Rs 5 lakh health insurance per family, has issued over 41 crore health cards, ensuring health equity across income segments.
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Stand-Up India and PM Vishwakarma Yojana have empowered women, SC/ST communities, and traditional artisans with financial support, entrepreneurship opportunities, and skill training.
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The PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) has extended food security benefits to more than 80 crore people, shielding the most vulnerable during economic shocks.
Each of these initiatives aligns with a targeted strategy—one that puts the last citizen first and uses technology to ensure no one is left behind.
Global Context: India Outshines G7 and G20 Economies
India’s Gini Index of 25.5 stands out in stark contrast to other major economies. China, for instance, registers a Gini score of 35.7, while the United States fares worse at 41.8. No G7 or G20 country comes close to India in terms of income equality, according to the World Bank’s comparative data.
In many developed nations, income inequality is widening—fueled by wage stagnation, automation, and social safety nets that are increasingly under pressure.
India’s approach, by contrast, appears to be working in the opposite direction: using digital infrastructure, targeted subsidies, and financial inclusion to foster equitable development.
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