Is India really becoming more equal? A closer look at the data behind the debate.

The World Bank’s latest figures show India’s Gini coefficient falling from 0.288 to 0.255—a headline‑grabbing result that seems to signal shrinking inequality. But when we dig into how those numbers are produced, a different picture emerges.

1️⃣ Lorenz curve & Gini coefficient refresher

Lorenz curve: plots the share of total income earned by cumulative portions of the population.

Gini coefficient: the gap between the Lorenz curve and the 45° “perfect equality” line (0 = total equality, 1 = total inequality).

2️⃣ Why the World Bank may be under‑counting inequality

It uses consumption‑expenditure surveys, not direct income or wealth data.

Rising incomes don’t automatically translate into higher consumption; households—especially richer ones—often save the extra rupee.

Ultra‑rich spending is systematically under‑reported, pulling the Gini downwards.

3️⃣ What alternative measures show

Research from the World Inequality Database (Thomas Piketty et al.) that blends tax filings, rich lists and national accounts recalculates India’s Gini at:

0.61 for income

0.75 for wealth

Far closer to what we observe: 1 % of Indians reportedly hold ~40 % of national wealth.

4️⃣ The takeaway

Consumption inequality can fall while income and wealth gaps widen. Robust policymaking—whether on taxation, social transfers or targeted skilling—demands metrics that capture the full distribution of income, savings and assets, not just what shows up in household spending.

Let’s keep the conversation centred on the right yardsticks so growth translates into genuine, broad‑based prosperity. 💡

#Inequality #GiniCoefficient #LorenzCurve #WorldBank #IncomeInequality #WealthInequality #IndiaEconomy #DevelopmentEconomics #PolicyMatters #DataDriven