India ranks 4th in global income equality: Gini Index of World Bank report 2025 explained

In a remarkable achievement, India has emerged as the fourth most equal country globally in terms of income distribution, according to the World Bank’s Spring 2025 Poverty and Equity Brief. With a Gini Index of 25.5, India has surpassed major economies like the United States (41.8), China (35.7) and all G7 and G20 nations, trailing only the Slovak Republic (24.1), Slovenia (24.3), and Belarus (24.4).

This milestone underscores India’s significant progress in reducing income inequality and extreme poverty over the past decade, driven by targeted government initiatives and inclusive economic policies.

Understanding Gini Index, India’s achievement

The Gini Index is a widely recognised measure of income inequality, ranging from 0 (perfect equality, where everyone has the same income) to 100 (absolute inequality, where one individual holds all income). A lower Gini score indicates a more equitable distribution of income across a population. India’s Gini Index of 25.5 places it in the “moderately low” inequality category, just shy of the “low inequality” group, which includes nations like the Slovak Republic, Slovenia, and Belarus. This score reflects a steady decline from 28.8 in 2011 to 25.5 in 2022, signalling consistent progress in balancing economic growth with social equity.

India’s ranking is particularly notable given its vast population of over 1.4 billion and diverse socio-economic landscape. Achieving such a high level of income equality in a country with complex demographics is a testament to sustained economic reforms and welfare programs. The World Bank report highlights that India’s performance outshines that of advanced economies, positioning it as a global model for equitable growth.

Key drivers of India’s income equality success

India’s journey toward greater income equality is rooted in a combination of robust economic growth and targeted social policies. Over the past decade, the country has implemented several transformative initiatives that have significantly reduced poverty and improved financial inclusion. Here are the key drivers behind India’s fourth-place ranking:

Poverty reduction efforts

The World Bank’s 2025 report notes that India lifted approximately 171 million people out of extreme poverty between 2011 and 2023. The proportion of the population living below the global poverty line of $2.15 per day dropped sharply from 16.2% in 2011–12 to just 2.3% in 2022–23.

Under the revised poverty threshold of $3.00 per day, India’s poverty rate in 2022–23 stands at 5.3%, further highlighting the nation’s progress in alleviating extreme poverty. These reductions have directly contributed to a more equitable income distribution.

Financial inclusion through PM Jan Dhan Yojana

The Pradhan Mantri Jan Dhan Yojana (PMJDY), launched in 2014, has been a cornerstone of India’s financial inclusion efforts. By June 2025, over 55.69 crore bank accounts have been opened under this scheme, bringing millions of unbanked individuals into the formal financial system.

This initiative has enabled access to credit, savings, and insurance, empowering low-income households and reducing income disparities.

Direct Benefit Transfers (DBT)

The DBT system has revolutionised welfare delivery by ensuring that subsidies and benefits reach intended recipients efficiently. By leveraging technology, such as Aadhaar-linked payments, DBT has minimised leakages and ensured that financial assistance reaches the most vulnerable populations, further narrowing the income gap.

Healthcare access via Ayushman Bharat

The Ayushman Bharat scheme has provided free health insurance of up to ₹5 lakh to millions of families, with over 41.34 crore Ayushman cards issued and more than 32,000 hospitals participating.

Furthermore, the Ayushman Vayo Vandana Yojana offers free treatment to citizens over 70, regardless of income. Improved healthcare access has reduced out-of-pocket expenses, enabling families to allocate resources to other essential needs, thereby supporting economic stability.

Food security, welfare programmes

The PM Garib Kalyan Anna Yojana has provided free food grains to over 80 crore people, ensuring food security for the poorest segments of society. Programs like Stand-Up India and PM Vishwakarma Yojana have supported entrepreneurs, particularly from marginalised communities, fostering economic empowerment and reducing inequality.

India’s progress compared to global peers

India’s Gini Index of 25.5 places it ahead of major economies like the United States (41.8), China (35.7), and all G7 and G20 nations. For context, the G7 includes countries like Canada, France, Germany, Italy, Japan, the UK, and the US, while the G20 encompasses a broader group of developed and emerging economies. India’s score is also lower than that of other nations in the “moderately low” inequality category, such as Iceland, Norway, Finland, Belgium, Poland and the United Arab Emirates, which further underscores its achievement.

The World Bank report emphasises that India’s ability to achieve greater income equality while maintaining rapid economic growth sets it apart from many developed nations, where income inequality has widened in recent years. India’s development model, which combines technology-driven governance with grassroots welfare outreach, offers valuable lessons for other countries aiming to reduce inequality at scale.

Challenges, road ahead

While India’s fourth-place ranking is a significant milestone, challenges remain in sustaining and furthering this progress. Rural areas, which house a large portion of the population, still face disparities in access to education, employment, and infrastructure. Additionally, while the Gini Index reflects improvements in income distribution, wealth inequality—such as disparities in asset ownership—remains a concern that requires targeted interventions.

To maintain its trajectory, India must continue investing in education, skill development, and job creation, particularly for its youth. Strengthening infrastructure in rural and underdeveloped regions, enhancing digital connectivity, and promoting sustainable economic growth will be critical to ensuring that the benefits of development reach all segments of society.[](http://www.republicworld.com/business/indias-incredible-rise-world-bank-says-its-beaten-us-and-china-on-equality)

Reactions

The World Bank’s report has sparked widespread discussion, with many praising India’s inclusive growth model. Posts on X reflect a sense of national pride, with users highlighting India’s progress in surpassing major economies like the US and China. For instance, some posts have emphasised the role of government schemes like PMJDY and DBT in driving this achievement, while others have called for broader awareness of this milestone. However, these sentiments should be viewed as reflective of public opinion rather than conclusive evidence.

Globally, India’s ranking has drawn attention to its unique approach to balancing economic growth with social equity. The World Bank’s acknowledgement of India’s progress highlights the potential for large, diverse nations to achieve equitable development through focused policies and technological innovation.

India’s rise to the fourth most equal country globally, as per the World Bank’s 2025 report, is a testament to its commitment to inclusive growth and poverty reduction. With a Gini Index of 25.5, India has outperformed major economies, including the US, China, and all G7 and G20 nations, while lifting 171 million people out of extreme poverty. Government initiatives like PM Jan Dhan Yojana, Direct Benefit Transfers, Ayushman Bharat, and PM Garib Kalyan Anna Yojana have played a pivotal role in this transformation, ensuring that economic gains reach all segments of society.

As India continues its journey toward greater income equality, its development model offers valuable insights for the global community. By sustaining its focus on financial inclusion, healthcare, and welfare, India is well-positioned to further reduce inequality and solidify its place among the world’s most equitable societies.