Brief Context
Context According to the World Bank, India’s Gini Index stands at 25.5, making it the fourth most equal country in the world. Major Highlights India was placed after the Slovak Republic, Slovenia and Belarus. India’s score is much lower than China’s 35.7 and far lower than the United States, which stands at 41.8.
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Syllabus: GS3/Economic Development
Context
- According to the World Bank, India’s Gini Index stands at 25.5, making it the fourth most equal country in the world.
Major Highlights
- India was placed after the Slovak Republic, Slovenia and Belarus.
- India’s score is much lower than China’s 35.7 and far lower than the United States, which stands at 41.8.
- India falls into the “moderately low” inequality category, which includes Gini scores between 25 and 30.
- India has a better score than all of the other 167 countries for which the World Bank has released data.
- Poverty Reduction: Extreme poverty dropped to 2.3% in 2022-23.
- 171 million Indians moved out of extreme poverty between 2011–23.
Gini Index
- The Gini Index shows how equally income, wealth or consumption is distributed across households or individuals in a country.
- It ranges in value from 0 to 100. A score of 0 means perfect equality and a score of 100 means absolute inequality.
- The higher the Gini Index the more unequal the country.
- Lorenz Curve: Graphically Gini Index can be explained by the Lorenz curve.
- A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household.
- A perfectly equal distribution will be shown by a diagonal line, while the actual distribution will be shown by the Lorenz curve.
- The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality.
- The bigger the gap, the more unequal the income.
Key Government Initiatives
- PM Jan Dhan Yojana: In 2025 over 55.69 crore people will hold Jan Dhan accounts, giving them direct access to government benefits and formal banking services.
- Aadhaar and Digital Identity: This system forms the backbone of welfare delivery by ensuring that benefits reach the right person at the right time through reliable authentication.
- Direct Benefit Transfer (DBT): The DBT system has streamlined welfare payments, reducing leakages and delays.
- Ayushman Bharat: The scheme provides health coverage of up to ₹5 lakh per family per year.
- The government launched the Ayushman Vay Vandana scheme to extend this coverage to all citizens aged 70 and above, regardless of income.
- The Ayushman Bharat Digital Mission has further strengthened this effort, with over 79 crore health accounts created to link individuals to digital health services.
- Stand-Up India: To promote inclusive entrepreneurship, the Stand-Up India scheme provides loans between ₹10 lakh and ₹1 crore to SC/ST and women entrepreneurs for setting up greenfield enterprises.
- This initiative empowers individuals from disadvantaged communities to participate in economic growth on their own terms.
- Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY): Launched during the COVID-19 pandemic, PMGKAY has continued to serve the most vulnerable sections of society.
- PM Vishwakarma Yojana: Traditional artisans and craftspeople are vital to India’s economic and cultural fabric, the scheme supports them with collateral-free loans, toolkits, digital training, and marketing support.
Conclusion
- India’s path to income equality has been steady and focused. The Gini Index of 25.5 reflects real change in people’s lives.
- As the world looks for models that combine growth with fairness, India’s example stands out.
- Its experience shows that equality and development are not separate goals.
Source: AIR