Today, several major Indian newspapers – including The Hindu, Business Standard, The Times of India and The Indian Express – carried a story claiming that India is the fourth most equal country in the world, attributing the finding to a recent World Bank report. This is incorrect: India ranks not four but 176 out of the 216 countries, as of 2019. Let’s unpack how this serious misrepresentation came to be.
This claim is based on a Press Information Bureau (PIB) release, which gravely misreads a World Bank brief. Unfortunately, multiple media houses ran with the story without any fact-checking or data scrutiny.
Here’s what the the World Bank Brief says:
“India’s consumption-based Gini index improved from 28.8 in 2011–12 to 25.5 in 2022–23, though inequality may be underestimated due to data limitations. In contrast, the World Inequality Database shows income inequality rising from a Gini of 52 in 2004 to 62 in 2023. Wage disparity remains high, with the median earnings of the top 10 percent being 13 times higher than the bottom 10 percent in 2023–24.”
The PIB picks out the 25.5 figure – which measures consumption inequality – and uses it to compare India to other equal countries whose rankings are based on income inequality. This is a basic and critical statistical error.
Note, the consumption inequality as an index is usually lower than income inequality for countries. This is because the rich save a large part of their income, so consumption, as unequal as it is, at least looks more equal than income. So, when the PIB compares India’s consumption Gini of 25.5 with other countries’ income Ginis, it’s comparing apples to oranges. In fact, the World Bank brief also does not make any such comparisons based on these numbers since they are not comparable, even though PIB seems to claim it does.
A fair comparison would either be to compare India’s income inequality with other countries’ income Ginis, or compare India’s consumption inequality with other countries’ consumption Ginis – which the World Bank brief does not provide.
Screenshot from PIB, where it says “India Achieves Greater Income Inequality”, with a figure right below saying “Consumption-based Gini Index”.
India’s Gini index for income inequality, comparable with other countries, is 61 (in 2019 and 2023), according to the world inequality database, and as also stated in the World Bank brief. This inequality has been consistently increasing since the 1990s, placing India as a highly unequal country (the higher the index, higher the inequality). Ranking countries based on how equal they are in terms of the income Gini, we find that India is ranked 176 out of a total of 216 countries in 2019, while its rank was 115 in 2009 – thereby becoming much more unequal, relative to other countries, over time. The wealth inequality Gini index as per the world inequality database for India is even higher, at 75 in 2023 (and 74 in 2019).
Gini coefficient of countries across the world. Source: World Inequality Database
India’s comparison with a few selected countries. India is among the most unequal in the world, alongside Brazil, South Africa. Source: World Inequality Database
Let’s turn our attention towards comparable consumption inequality figures. First, the World Bank does not compare India’s consumption Gini index with any other country. Worse still, the World Bank brief explicitly cautions that India’s consumption inequality may be underestimated due to data limitations; specifically it notes “International poverty estimates for India are derived from the 2011-12 Consumption Expenditure Survey (CES) and the 2022-23 Household Consumption Expenditure Survey, using the modified mixed reference period and a spatially and intertemporally deflated welfare aggregate. Changes in questionnaire design, survey implementation, and sampling in the 2022-23 survey represent improvements but present challenges for making comparisons over time. Moreover, sampling and data limitations suggest that consumption inequality may be underestimated.” And those limitations are substantial. The survey methodology for the 2022-23 Household Consumption Expenditure Survey underwent considerable changes from the earlier 2011-12 CES, making direct comparisons unreliable. This has been widely discussed by Indian economists and statisticians.
To make some reasonable comparisons of consumption inequality, we can look at inequality in per capita calorie intake, which also reflects food consumption disparities. According to data from the Food and Agriculture Organisation (FAO) of the United Nations and processed by Our World in Data, we find that India ranked 102nd out of 185 countries in 2019 – a worse position than in 2009, when it ranked 82nd. So, by this measure too, India’s relative performance has deteriorated over the past decade.
Whichever way one looks at the data, the picture is clear: India is a highly unequal country, and inequality is worsening. The intervention needed for a massive redistribution, including taxing the rich, is urgent. Misreporting this reality is not just misleading – it can be dangerous. When trusted national media outlets reproduce statistical errors without scrutiny, they obscure urgent issues facing the country and downplay the lived realities of millions that we collectively need to address.
Surbhi Kesar is a Senior Lecturer in Department of Economics at SOAS University of London, and researches issues of labour, informal economy and economic development in India.
Courtesy: The Wire