Beyond the numbers

Inequality has many layers

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A recent report showing India as among the most equal countries in the world, based on a Gini index of 25.5, has sparked a debate. The Gini coefficient measures inequality within a population, with a higher value indicating higher inequality.

The figure in question, cited from the recent World Bank "Poverty and Equity Brief" for India, measures consumption inequality, not income or wealth inequality. This distinction is crucial because consumption-based measures often tend to underreport the true extent of inequality, especially in a country like India, where high-income groups often mask their incomes or altogether evade household surveys.

While it is true and commendable that extreme poverty has declined significantly from 16.2 per cent in 2011-12 to only 2.3 per cent in 2022-23, it may not be possible to say the same about inequality.