Why in the News?
As of 2025, India ranks as the world’s fourth most equal country in terms of income distribution, according to the World Bank’s Spring 2025 Poverty and Equity Brief.
About the World Bank’s Spring 2025 Poverty and Equity Brief:
- What It Is: The Poverty and Equity Brief is a biannual publication by the World Bank’s Poverty and Equity Global Practice Group.
- Data Coverage: It includes country-level statistics on poverty, inequality, and shared prosperity using household surveys, national datasets, and income tracking.
- Comparative Perspective: The brief allows comparison across income groups and regions, helping track Sustainable Development Goals (SDGs).
- Spring 2025 Focus: This edition emphasizes post-pandemic recovery, distributional equity, and the effectiveness of welfare policies in developing nations.
Key Parameters Involved:
- Gini Index: It measures how equally income is distributed.
- Score Range: 0 = complete equality; 100 = complete inequality.
- India’s Score: 25.5 in 2022–23, showing strong income equality.
- International Poverty Lines:
- $2.15/day (2017 PPP): Global standard for extreme poverty.
- $3.00/day: Threshold for lower-middle-income countries like India.
- Poverty Headcount Ratio: Reflects how many people live below the poverty line.
- India’s Status: 2.3% below $2.15/day and 5.3% below $3/day in 2022–23.
- Shared Prosperity Premium:
- Measures if the bottom 40% of the population are doing better or worse than average.
- High premium means inclusive growth.
Key Highlights from the Spring 2025 Report:
- India’s Gini Score: Among Most Equal
- With a score of 25.5, India is the 4th most equal country, after Slovak Republic (24.1), Slovenia (24.3), and Belarus (24.4).
- India outperforms China (35.7) and all G7 and G20 nations.
- Improved from 28.8 in 2011, showing a steady decline in inequality.
- Major Poverty Reduction Milestone
- Between 2011 and 2023, 171 million people moved out of extreme poverty.
- Share of population under $2.15/day fell from 16.2% to 2.3%.
- Share under $3/day fell to 5.3%, marking a significant decline.
| [UPSC 2007] Consider the following statements:
1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India. 2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population. Which of the statements given above is/are correct? Options: (a) 1 only (b) 2 only* (c) Both 1 and 2 (d) Neither 1 nor 2 |
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