World Bank claims a drastic reduction in inequality in India. There is more to the story

Indian Express

18-07-2025

Written by Deepanshu Mohan
A recent World Bank report has claimed a drastic reduction in inequality in India between 2011 and 2022. However, it misses a fundamental conceptual and measurable distinction between income surveys and consumption surveys. This distinction is critical, as an income-based Gini index is typically higher — reflecting greater inequality — whereas a consumption-based Gini is lower, particularly in low- and middle-income countries where such surveys are more common. Beyond these methodological issues, normative concerns around how inequality is conceptualised and measured also deserve deeper scrutiny — something the World Bank report fails to elucidate.
In addition to the World Bank study, the Ministry of Statistics and Programme Implementation (MoSPI) released the Sustainable Development Goals (SDG) National Indicator Framework Progress Report 2025, which tracks India's performance across 17 SDGs using 284 indicators. While this report is a valuable tool for aligning India's metrics with global targets, it primarily emphasises administrative progress and aggregate outcomes — overlooking disparities at the ground level in access, affordability, and inclusion. These dimensions are critical to measuring and understanding relative poverty and inequality.
This is where the Access (In)Equality Index (AEI) 2025, developed annually by the Centre for New Economic Studies (CNES), offers a vital complement to the current debate on inequality assessment. Grounded in the context and patterns of economic development in low- and middle-income countries, the AEI draws on official data sources and reorganises indicators through a disaggregated, intersectional lens using the 4A framework: Availability, Affordability, Approachability, and Appropriateness. These are then assessed across five measurable pillars: Access to Basic Amenities, Access to Healthcare, Access to Education, Access to Socio-Economic Security, and Access to Legal Recourse.
Take, for example, the Basic Amenities pillar. The AEI correlates with SDG-NIF indicators drawn from SDGs 1, 6, 7, and 11—including SDG 6.1.1 (proportion of households with piped water supply), 6.2.1 (households with improved sanitation/toilet facilities), 7.1.1 (households using clean cooking fuel or electricity), and 11.1.1 (access to affordable, safe housing under schemes like PMAY-U).
The SDG-NIF Progress Report 2025 presents some encouraging trends. Piped water coverage, for instance, rose from 21.33% in 2019–20 to 80.22% in 2024–25. Access to clean cooking fuel reportedly exceeded 100% coverage in some years, indicating strong programmatic reach. Similarly, over 97% of schools had separate toilets for girls by 2023–24.
However, the AEI ranks states not only on the presence of infrastructure but also on its functionality, usability, and inclusivity. Goa, for instance, scores highest in the Basic Amenities pillar (0.97), while Jharkhand (0.31), Bihar (0.38), and Odisha (0.39) lag significantly behind.
Although the SDG-NIF reports progress in bringing water 'within premises,' the AEI shows that only 25% of states have piped water coverage exceeding 50%. This implies that in most states, households still fetch water from outside their homes—a burden that falls disproportionately on women.
In healthcare, the AEI aligns with SDG 3: Good Health and Well-being, referencing indicators like institutional delivery rates (SDG 3.1.2), immunisation coverage (SDG 3.b.1), out-of-pocket expenditure on health (SDG 3.8.2), and the doctor-to-population ratio. Yet, the AEI provides a more nuanced view by disaggregating access by geography and affordability. While Goa (93%) and Tamil Nadu (89.9%) report high levels of adequate antenatal care, Nagaland reports just 20.7%—highlighting critical gaps in maternal healthcare in the Northeast and other hilly regions.
In terms of socio-economic security, both the SDG-NIF and AEI engage with indicators from SDGs 1 (No Poverty), 5 (Gender Equality), 8 (Decent Work and Economic Growth), and 10 (Reduced Inequalities). National-level data shows steady progress: the labour force participation rate (LFPR) among individuals aged 15–59 increased from 61.6% in 2022–23 to 64.3% in 2023–24. Banking outlets per 100,000 population rose from 59.9 in 2015–16 to a peak of 267.5 in 2021–22, before stabilising at 144.3 in 2023–24. ATM expansion has been more modest, growing from 16.5 to 18.5 in the same period.
The AEI contextualises these outcomes by exposing disparities in access to employment, financial infrastructure, and income equity. Andhra Pradesh leads in the socio-economic security pillar with a score of 0.70, followed by Goa (0.60), while Bihar (0.18), Assam, and Manipur (around 0.21 each) perform the worst. Notably, all five southern states feature among the top eight performers, whereas many northeastern states consistently rank at the bottom—reflecting the role of policy focus and institutional strength.
In education, both SDG-NIF and AEI monitor indicators aligned with SDG 4: Quality Education. While SDG-NIF time-series data shows improvement, the AEI reveals large disparities in actual access and quality. The proportion of secondary and higher secondary schools with internet access increased from 46.3% in 2015–16 to 78.5% in 2023–24. However, AEI data shows that in over half of Indian states, less than 50% of schools have functional computers, and only 25% of states surpass 75% coverage. In terms of digital readiness, only Kerala and Gujarat exceed 60% school-level internet coverage.
The Access to Legal Recourse pillar, aligned with SDG 16: Peace, Justice, and Strong Institutions, assesses the functionality and inclusiveness of judicial systems. The SDG-NIF paints a modest picture: courts per lakh population increased from 1.82 in 2016 to 1.93 in 2024, and judges from 1.33 to 1.55 in the same period — suggesting incremental capacity building.
The AEI adds an equity lens by incorporating gender-disaggregated data on representation in legal institutions. Sikkim leads with 33.3% of judges being women — an encouraging sign. By contrast, states such as Bihar, Uttarakhand, Manipur, Meghalaya, and Tripura report 0% women judges, underscoring persistent gender exclusion. Moreover, the SDG-NIF records that 1.2% of women aged 18–29 reported experiencing sexual violence before the age of 18 (2019–21), a figure likely understated due to underreporting and cultural stigma.
The writer is Professor of Economics and Dean, IDEAS, Office of Interdisciplinary Studies; Director, Centre for New Economics Studies, OP Jindal Global University; and currently Visiting Professor at the London School of Economics and Visiting Research Fellow, University of Oxford. Ankur Singh and Aditi Desai, Research Analysts at CNES, contributed to this column