India Ranked Among World’s Most Equal Countries in 2025 Gini Index

Relevance: GS II & GS III – Important international body, Economy 

According to the most recent World Bank report, India made headlines by ranking fourth in the 2025 Gini Index, making it one of the most equal nations in the world. Supported by the Spring 2025 Poverty and Equity Brief, this noteworthy development not only demonstrates India’s progress in lowering income inequality but also coincides with other significant achievements like the removal of 171 million people from extreme poverty. 

India’s Global Equality Rank Soars

The Gini Index ranks India fourth with a score of 25.5, significantly lower than China (35.7), the USA (41.8), and the United Kingdom (34.4). It is also more equitable than all G7 and G20 nations, many of which are regarded as advanced economies.

• With a score of 24.1 out of 167 nations for which the World Bank has published data, the Slovak Republic is ranked first among the most equal nations.
• The report claims that India is in the “moderately low” inequality category and is only a short distance away from falling into the “low inequality” group, which also includes Belarus (24.4), Slovenia (24.3), and the Slovak Republic (24.1).

About Gini Index

The degree to which the distribution of income or consumption among people or households in an economy differs from a perfectly equal distribution is measured by the Gini Index. Put more simply, it shows how evenly income is distributed across a nation.

• The Gini Index has a range of 0 to 100; perfect equality is represented by an index of 0, and perfect inequality is implied by an index of 100. A nation’s level of inequality increases with its Gini Index.

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How India’s Poverty Rate Sharply Declined

The World Bank recently changed its definition of poverty from $2.15 per day to $3 per day (daily consumption of less than $3). The extreme poverty rate in India drops significantly from 27.1% in 2011–12 to 5.3% in 2022–2023 as a result of the revised poverty line. According to the most recent World Bank data, the number of people living in extreme poverty decreased from 344.47 million to just 75.24 million.

• In any economy, the poverty line is the income threshold that is used to determine who is considered impoverished. It is the bare minimum of income required to cover essential expenses and varies from nation to nation based on the state of the economy as a whole. It is crucial to remember that setting a meaningful poverty line depends on the context, which includes both time and place.

Mains:

Question: With 171 million people lifted out of extreme poverty between 2011 and 2023, India shows remarkable progress. To what extent can this be attributed to targeted social welfare interventions and inclusive economic policies?

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Mains:

Question: Poverty and malnutrition create a vicious cycle, adversely affecting human capital formation. What steps can be taken to break the cycle? (UPSC IAS 2024)

MCQs

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Question: With reference to the Gini Index, consider the following statements:

1. A Gini Index of 0 indicates perfect inequality, while 100 indicates perfect equality.
2. The Gini Index measures income and consumption inequality across individuals or households.
3. A lower Gini Index score represents a more equitable society.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer: B

MCQs PYQs

Question: The Multi-dimensional Poverty Index developed by Oxford Poverty and Human Development Initiative with UNDP support covers which of the following? (UPSC Prelims 2012)

1. Deprivation of education, health, assets and services at household level 
2. Purchasing power parity at national level 
3. Extent of budget deficit and GDP growth rate at national level 

Select the correct answer using the codes given below: 

1. a) 1 only 
2. b) 2 and 3 only 
3. c) 1 and 3 only 
4. d) 1, 2 and 3 

Answer: a

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