A deeply misleading narrative has recently been doing the rounds — that India is the ‘fourth most equal country in the world’. It arises from the misrepresentation of the World Bank’s data on inequality through household consumption.
The claim of ‘fourth most equal’ is being justified using the country’s Gini index score of 25.5 in consumption. The Gini index is a measurement of inequality that ranges from 0 to 100, where a score closer to 0 is indicative of a more equal distribution of income and wealth in an economy and a score closer to 100 represents inequality.
A closer look at the data shows how severe India’s inequality is, in terms of income and wealth. India’s income Gini index is approximately 61 (2019 and 2023), ranking it 176th; wealth inequality Gini index stands at 75.
Further, the data from the World Inequality Database draws on national income accounts, which miss large swathes of informal income and fail to capture extreme wealth concentration amidst different classes of people in an economy, a serious issue in a country where the top 10% owns over 77% of national wealth.
What is indeed more important is that the contradiction exposes the need for more accurate, transparent, and nuanced public communication about inequality in India, especially at times when economic and social disparities are evidently deepening.
The trajectories of the income and wealth inequalities in India through the years have been plotted below for the readers’ reference:
A World Bank brief recently highlighted a decline in India’s consumption based Gini coefficient from 28.8 to 25.5 between 2011-12 and 2022-23, suggesting improved equality in consumption. However, this obscures more than it reveals.
Gini coefficients are, by construction, disproportionately sensitive to changes in the middle of the distribution and less responsive to shifts at the extremes, where the structure inequality often resides. A lower Gini does not necessarily mean those at the bottom are better off; it only implies a narrowing of measured inequality, which may reflect statistical artefacts rather than material improvements.
Moreover, consumption seems to be more structurally distributed because poorer households spend most of their income, while the wealthier save and invest. In the Indian context, where income data is largely unavailable and household surveys like those conducted by the NSS exclude the ultra-rich and the ultra-poor, inequality estimates are bound to structurally understate the true extent of inequality.
To complicate matters further, two rounds of NSSO are not methodologically comparable owing to the revised sampling and data collection strategy, which in turn questions the validity of direct comparisons across time. When politically motivated success stories are narrated using distorted methodologies, it becomes imperative to read data a little more carefully and beyond technicality.
This brings us to the broader political economy argument of inequality in India. As Partha Chatterjee argues in The Politics of the Governed, large sections of India’s poor belong not to “civil society” but to “political society”, where groups are governed not through universal rights and entitlements, but through fragmented, targeted, discretionary mechanisms. The State’s relationship with them is fragmented and deeply uneven. In this context, national-level claims of equality, presented as aggregate data, erase the lived experience of inequality and exclusion that operates through caste, gender, region, and informality.
The declining Gini coefficient is rather stripped of structural context, and generates fiction of inclusion, concealing the fact that institutional inequality remains pervasive.
Seen through this lens, the equality claim becomes part of a larger political performance. As theorists like Antonio Gramsci suggest, these data points help build “common sense” beliefs — widely accepted ideas that serve the interests of dominant groups. They depoliticise inequality, framing it as something technical and manageable, rather than structural and urgent.
This can be connected to what can be termed as “statistical nationalism”, a growing trend where States use curated metrics to assert global success. In India, this takes the form of showcasing select numbers, poverty reduction, GDP growth, per capita income, and now income equality, while ignoring indicators that capture caste-based deprivation, gendered exclusions, or regional underdevelopment.
This is not just a debate about numbers, it is about what kinds of lives are made visible, legible, governable, and who gets to define progress.
If inequality is to be meaningfully addressed, we must move beyond income snapshots and ask structural questions: who owns what, who is excluded from public spending and what (active) role the State can play to indeed address the question of inequality.
This political economy of inequality measurement in India is not exclusive of the broader context and structure of development financing concerning who pays, who benefits, and who gets counted. As it is already widely discussed and debated, the erosion of statistical transparency in India since 2014, associated with a systemic weakening of institutions in generating and disseminating credible socio-economic data, has already led to undermining trust in official statistics. The larger political argument may be indicative of the fact that, less robust the measurement of inequality, easier it becomes to justify the regressive fiscal policies and the underwhelming social spending.
This brings into picture how the burden of revenue generation for development financing has been evidently shifting from the wealthy to the poor in the last decade.
The landmark corporate tax cut in 2019, from 30 to 22% and 15% for new manufacturing firms, led to an estimated revenue loss of Rs 1.45 lakh crore, annually. Although it was justified as a growth stimulus, it came as a direct cost to the middle and lower income earners as taxpayers and a direct hit to the public investment in the health, education and welfare sectors.
India’s tax-to-GDP ratio also remains one of the lowest among major economies. Where wealth and inheritance taxes have been almost non-existent since 1985, reintroduction of the same has been politically resisted. Additionally, an attempt to bring about a structural reform through the Goods and Service Tax (GST), has rather led to a regressive taxation regime with higher effective burden on poorer households though ‘uniform’/high tax rates on essential goods.
India has also been lagging behind in social sector spending well below global standards, be it in health, education or social protection. The government expenditure on healthcare as a percentage of GDP is as low as 1.8% in the current year, an improvement from the National Health Accounts of 2019-20’s 1.28%, but extremely short of the WHO recommendation of 5%. Public expenditure on education also remains under 3% of GDP, despite frequently stated commitments to reach 6% as per the National Education Policy, 2020.
Moreover, though nominal allocations for most social protection schemes were seen to increase, real spending has declined for programmes in key sectors like education, health, employment and rural development.
Let us take the case of employment. India is home to one of the largest informal economies in the world, which is a conundrum itself, speaking in terms of the recent report on equality. Over 85 to 90% of workers in the country work outside formal arrangements and struggle in terms of regular income, social security benefits and protection. On the other hand, real wages, particularly for rural workers have stagnated or declined over the years, whereas the GDP has even ‘expanded’. This concern particularly highlights the fact that there is increasing precarity and fall in the purchasing power with lower or stagnated wages, instead of a shared prosperity.
In addition, there also has been a large deterioration of job quality in terms of decline in secure employment, rise in casual work and decline in contractual framework within employment conditions.
The shrinking commitment from the State towards the workers is also very concerning. The budget allocations for MNREGA, which is a lifeline for several of rural livelihoods, was slashed by 33% to Rs 60,000 crore, despite high demand and the need for employment avenues and pending wage arrears. In addition, Aadhar based payment systems have only furthered the delays and exclusions. This reflects a broader concern of systematic structural abandonments, in terms of redistributive mechanisms.
While the headlines may claim and echo statistical equality, the micro and sectoral dynamics mirror a different picture altogether, with reducing activity of welfare state and labour market vulnerabilities, which directly has links to avenues to earn better household incomes and increase the consumption expenditures for overall household wellbeing.
Equality that is not structural, not rooted in redistribution, not supported by public investment, and not attentive to the lived realities and exclusions on the lines of gender and caste, is no equality at all.
In a country where the majority are informal workforce where the marginalised are in a risk of dispossession, such broader claims risk becoming a national technocratic illusion, which masks reality. The danger lies not just in statistical misrepresentation, but in how these numbers are mobilised to legitimise fiscal austerity, dilute demands for welfare, and frame India as a development success story untethered from its social contradictions.
What is needed instead is better metrics and better politics, which accounts for access to public goods, welfare provisioning by acknowledging the structural roots of exclusion by reviving public spending, and encouraging possibilities to embrace progressive taxation. These are ways that close rather than widen the gap between India’s rich and poor, between its formal elite and its informal majority.
The question is not whether India appears equal on paper, but whether it is willing to confront the inequalities it has long denied.
Aurolipsa Das and Boddu Srujana work as Assistant Professors in the Department of Economics at SRM University, Andhra Pradesh.
Debolina Biswas works as Assistant Professor in the Department of Economics at Gurudas College, University of Calcutta.
Views expressed are the authors’ own.