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Indian Express
10-07-2025
- Business
- Indian Express
Daily subject-wise quiz : Economy MCQs on coking coal, Gini coefficient and more (Week 118)
UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today's subject quiz on Economy to check your progress. 🚨 Click Here to read the UPSC Essentials magazine for June 2025. Share your views and suggestions in the comment box or at With reference to the Gini Index or Gini coefficient, consider the following statements: 1. It is a way to understand how equally income, wealth or consumption is distributed across households or individuals in a country. 2. According to the World Bank, India's Gini Index stands at 25.5, making it the fourth most equal country in the world. 3. India's consumption-based Gini index declined from 2011-12 to 2022-23. How many of the statements given above are correct? (a) Only one (b) Only two (c) All three (d) None Explanation — 'India is not only the world's fourth largest economy, it is also one of the most equal societies today' . According to the World Bank's Poverty and Equity Brief, India has a Gini Index of 25.5, ranking it as the world's fourth most equal country after the Slovak Republic, Slovenia, and Belarus. This indicates that the benefits of economic progress are being distributed more evenly across the population. — According to the World Bank, India's Gini Index is 25.5, ranking it fourth most equal in the world. Hence, statement 2 is correct. — The Gini Index is a simple yet effective approach to understand how income, wealth, and consumption are divided evenly across households or individuals in a society. Hence, statement 1 is correct. — The Gini Index, often known as the Gini coefficient, was named after the early twentieth-century Italian statistician Corrado Gini and has long been the most widely used measure of inequality. It assesses inequality on a scale of 0 to 1 (or 0% to 100%), with higher scores indicating greater disparity. — 'India's consumption-based Gini index improved from 28.8 in 2011-12 to 25.5 in 2022-23, but inequality may be underestimated due to data limitations…' According to the World Inequality Database, income inequality has increased from 52 Gini in 2004 to 62 in 2023. The wage gap remains substantial, with the top 10% 's median earnings 13 times higher than the bottom 10% in 2023-24.' Hence, statement 3 is not correct. Therefore, option (b) is the correct answer. (Other Source: Consider the following statements: 1. The Corporate Average Fuel Efficiency (CAFE) covers a broader range of emissions, including particulate matter and NOx. 2. The BS VI focuses on fuel efficiency and CO2 emissions. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Explanation — The Worldwide Harmonised Light Vehicles Test Procedure (WLTP), which the European Union adopted in 2018, ensures that emissions of carbon dioxide, nitrogen oxides (NOx), and particulate matter from vehicles on the road more closely reflect results recorded in laboratory conditions. — The carmaker also advised that the government wait until the next Corporate Average Fuel Efficiency (CAFE) phase 3 regulations, which are presently being discussed, to clarify their position on adopting WLTP. — While both CAFE and BS VI regulations currently use the Modified Indian Driving Cycle (MIDC) for testing, they serve different purposes: CAFE focusses on fuel efficiency and CO2 emissions, whereas BS VI covers a broader range of emissions, including particulate matter and NOx, which are important pollutants. Although CAFE 3 standards have not yet been announced, the Bureau of Energy Efficiency (BEE), the organisation in charge of developing them, recommended in June 2024 a transition from MIDC to WLTP beginning March 31, 2027. Hence, statements 1 and 2 are not correct. Therefore, option (d) is the correct answer. Consider the following statements: 1. Cambodia is among the earliest and most active supporters of China's global infrastructure plan, the Belt and Road Initiative (BRI). 2. China is the largest financier of Cambodia's infrastructure — including roads, bridges, dams, railways, and special economic zones (SEZs). Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Explanation — Six of the 14 countries announced were ASEAN members, with Laos and Myanmar facing the highest levies of 40%. Thailand and Cambodia, which have received significant Chinese investment and expanded economic cooperation with China over the last decade, were slapped with 36% US tariffs. Meanwhile, Indonesia, which imports about one-third of its exports from China, was subject to a 32% reciprocal duty. — China is the main financier of Cambodian infrastructure, which includes roads, bridges, dams, trains, and special economic zones (SEZs). Cambodia was also one of the first and most ardent sponsors of China's Belt and Road Initiative (BRI), a global infrastructure project. Hence, statements 1 and 2 are correct. — Notably, following the first trade war, China boosted its engagement with ASEAN countries through investment and industrial integration, which helped to enhance regional manufacturing. In May, China and ASEAN concluded negotiations to expand their free trade area, extending cooperation into the digital and green sectors, as well as other growing industries. Therefore, option (c) is the correct answer. Consider the following statements about coking coal: 1. The import of coking coal has consistently increased from 2020-21 to 2023-24. 2. India included coking coal in the list of critical minerals in 2022. 3. It is mainly imported by the refining industry. How many of the statements given above are correct? (a) Only one (b) Only two (c) All three (d) None Explanation — The government must include coking coal in the list of critical minerals and provide special dispensation to enhance the domestic production of the key raw material for steel production, according to a Niti Aayog report. Hence, statement 2 is not correct. — The report 'Enhancing Domestic Coking Coal Availability to Reduce the import of Coking Coal', said considering India's commitments to Net Zero by 2070, the country's interests would be better served by fully utilising the proved reserves of medium coking coal (16.5 billion tonne) in India for metallurgical purposes. — The European Union has declared the ingredient as a critical raw material along with 29 other raw materials which include 'green energy' minerals like lithium, cobalt, and rare earths. (*Import (in million tonnes) up to April-Sept, 2024 (Source:-CCO)) — Coking coal is imported by the steel industry primarily to bridge the gap between demand and indigenous availability and to improve quality. Other sectors, such as the power sector, cement, and coal traders, import non-coking coal. Hence, statement 3 is not correct. — The import of coking coal has not increased consistently from 2020-21 to 2023-24. Hence, statement 1 is not correct. Therefore, option (d) is the correct answer. (Other Source: With reference to the deposit insurance, consider the following statements: 1. The insurance cover of Rs 2 lakh per depositor is for all accounts held by the depositor in all branches of the insured bank. 2. The DICGC insures only commercial banks including branches of foreign banks functioning in India and does not insure regional rural banks. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Explanation — The government is mulling raising the insurance protection for bank accounts above the present maximum of Rs 5 lakh, according to Financial Services Secretary M Nagaraju. — Deposit insurance is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a specialised branch of the Reserve Bank of India. About DICGC — The DICGC aims to safeguard 'small depositors' from the risk of losing their savings in the event of a bank failure. — The insurance cover of Rs 5 lakh per depositor applies to all accounts held by the depositor at all branches of the insured bank. Hence, statement 1 is not correct. — The DICGC insures all commercial banks, including foreign bank branches in India, local area banks, regional rural banks, and cooperative banks. However, the DICGC does not cover primary cooperative societies. Hence, statement 2 is not correct. — Savings, fixed, current, and recurring deposits are all protected. The DICGC does not insure deposits made by foreign, central, or state governments, as well as interbank deposits. Therefore, option (d) is the correct answer. Daily Subject-wise quiz — History, Culture, and Social Issues (Week 116) Daily subject-wise quiz — Polity and Governance (Week 118) Daily subject-wise quiz — Science and Technology (Week 118) Daily subject-wise quiz — Economy (Week 117) Daily subject-wise quiz — Environment and Geography (Week 117) Daily subject-wise quiz – International Relations (Week 117) Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
Indian Express
10-07-2025
- Business
- Indian Express
Measuring inequality
A government release over the weekend claimed that 'India is not only the world's fourth largest economy, it is also one of the most equal societies today'. Using data from the World Bank's latest Poverty and Equity Brief, it said India's Gini Index was at 25.5, which made it the world's 'fourth most equal country…after the Slovak Republic, Slovenia and Belarus', reflecting how fruits of economic progress were being shared 'more evenly across its population'. The Gini Index or Gini coefficient, named after the early 20th century Italian statistician Corrado Gini, has historically been the most commonly used measure of inequality. It measures inequality on a scale from 0 to 1 (or 0% to 100%), with higher values indicating higher inequality. The government's claim has been contested both by academics who study inequality, as well as observers who see India as a country with high and rising inequality. An incomplete picture The paragraph in the World Bank's Poverty and Equity Brief referenced by the government includes important qualifiers that the release did not mention: '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… 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 government release does not mention the 'data limitations' that the World Bank itself has flagged, and does not take into account the Gini Index value calculated by the World Inequality Database, which shows a rise in the Gini Index from 2004 to 2023. Consumption-based Gini To map income inequality, countries often conduct surveys on income data. India, however, collects data on consumption, not income. When it comes to inequality, this makes a big difference because variation in income is far more than variation in consumption. As people earn more, the bulk of their additional income is turned into savings. As such, a Gini Index of inequality using consumption data underestimates the level of inequality in a society. Also, economists such as Anmol Somanchi, who works at the World Inequality Lab (run by the Paris School of Economics and University of Berkeley, California), have pointed out that it is misleading to compare India's consumption-based Gini Index value with that of other countries, which use an income-based Gini. In short, the use of consumption-based Gini underestimates inequality and undermines comparability with other countries. Limitations of survey data It is widely acknowledged that the gap between the bottom 10% and top 10% of the population is widening, even if it is assumed that everyone in the country is becoming better off. However, the calculation of inequality is unlikely to capture the widening gap. This is because surveys, whether they are about consumption or income, typically falter in capturing the data of the richest. This is for two broad reasons. One, the rich exhibit what is technically called a 'differential non-response', Somanchi said. In other words, the rich tend to decline to participate in surveys much more than the poor do. Two, the way the sampling of these surveys works, the chances of the richest persons in the country being drawn in a random sample are pretty low. This becomes a big reason for underestimation of inequality if just a handful of the extremely rich are driving up inequality. Thus, if 90% of the population is not 'unequal' while most of the inequality is being driven by the top 1%, any survey that fails to sample the top 1% will fail to capture the real picture on inequality. Researchers have flagged this underestimation in several other countries such as the US, the UK, and many other European countries as well. A way to correct for this lapse in sampling is to use the survey data in conjunction with income tax data, which is uniquely accurate in capturing the incomes of the top earners in a country. Studies that did this in the UK, the US, and elsewhere found that relying solely on survey data underestimated inequality. The World Inequality Lab Gini Index, which shows that inequality in India has increased, uses income tax data to correct for this gap. Problems with Gini Index The Gini Index too does not capture all aspects of the inequality picture. This is because it is not 'sensitive' to changes at the extremes of a population, but is overly sensitive to changes in the middle. This has to do with the way the Gini Index is calculated — and experts have been urging for close to 50 years now that other measures should be considered. One option is the Palma Ratio, named after a Chilean economist who suggested looking at the shares of income (or wealth) at the extremes — the bottom 50% and the top 10%, for instance. When such comparisons are calculated with the use of income tax data (apart from survey data), the emerging picture is grim: it shows income inequality is now worse than in the colonial period, and the top 1% earn far more than the bottom 50%. Bigger picture on inequality The point of studying inequality is to allow governments to tailor appropriate policies to alleviate excessive inequality. However, an inaccurate reading of inequality can lead to policies that actually exacerbate existing inequalities. If high inequality is not contained, it can create social unrest and eventually militate against sustained economic growth. Relying solely on the Gini Index, that too with severe data limitations, can obscure the reality. As explained above, a given version of the Gini Index could be falling even when inequality between the two extremes of the population may be rising. Udit Misra is Deputy Associate Editor. Follow him on Twitter @ieuditmisra ... Read More
Indian Express
07-07-2025
- Business
- Indian Express
Knowledge Nugget: World Bank ranked India among ‘most equal countries': How is it relevant for UPSC Exam
Take a look at the essential events, concepts, terms, quotes, or phenomena every day and brush up your knowledge. Here's your knowledge nugget for today on Gini Index 2025. (Relevance: UPSC frequently asks questions on reports and indices. The key takeaways from these reports are also essential fodder for your Mains examination for intricate points. In 2012, a question was asked on the Multidimensional Poverty Index; in 2019, the question was on the Global Competitiveness Report. Therefore, it becomes important to know about the indices and reports that are in the news.) India has emerged not only as the world's fourth-largest economy, but also as one of the 'most equal countries' globally, according to a new World Bank report that places the country just behind the Slovak Republic, Slovenia, and Belarus. In this context, let's know about the Gini Index and key highlights of World bank's report. 1. The Gini Index has placed India in the fourth position with a score of 25.5, much lower than countries like China (35.7), the USA (41.8), and the United Kingdom (34.4). It is also more equal than every G7 and G20 country, many of which are considered advanced economies. 2. Out of the 167 countries for which the World Bank has released data, the Slovak Republic with a score of 24.1 is ranked in first position among the most equal countries. 3. According to the report, India falls into the 'moderately low' inequality category and is just a fraction away from joining the 'low inequality' group, which includes countries like the Slovak Republic (24.1), Slovenia (24.3), and Belarus (24.4). 4. Notably, a recent World Bank report — 'The Spring 2025 Poverty and Equity Brief' — also highlighted that India has successfully lifted 171 million people out of extreme poverty. 5. The Gini Index measures the extent to which the distribution of income or consumption among individuals or households within an economy deviates from a perfectly equal distribution. In simpler terms, it provides a clear picture of how evenly income is distributed within a country. 6. The index ranges from 0 to 100 — a Gini Index of 0 represents perfect equality, while an index of 100 implies perfect inequality. The higher the Gini Index the more unequal the country. 7. The data for the Index is based on primary household survey data obtained from government statistical agencies and World Bank country departments. Data for high-income economies are mostly from the Luxembourg Income Study database. The Gini index, or Gini coefficient, was developed in 1912 by Italian statistician Corrado Gini. The index is based on the difference between the Lorenz curve (the observed cumulative income distribution) and the notion of a perfectly equal income distribution. After understanding the Gini Index and the World Bank's latest report, let's also know the recently revised global poverty line by the World Bank — a topic that has sparked much discussion lately. 8. The World Bank recently revised its threshold poverty line to $3 a day (daily consumption of less than $3) from the earlier $2.15 a day. With the revised poverty line, the extreme poverty rate for India declines sharply to 5.3 per cent in 2022-23 from 27.1 per cent in 2011-12. In absolute terms, people living in extreme poverty fell from 344.47 million to just 75.24 million, latest data from the World Bank shows. 9. Poverty line is the level of income used as a cut-off point for deciding who is poor in any economy. It represents the minimum income level necessary to meet basic needs, and varies across countries depending on their overall economic conditions. It is important to note here that the context (both time period and location) is critical to arriving at a meaningful poverty line. 10. Despite the World Bank revising its extreme poverty line to adjust for global inflation in 2021 prices, India seems to have fared well, with the poverty numbers holding good. At $3 a day threshold, India's extreme poverty rate for 2022-23 rises from 2.3 per cent (at a poverty line of $2.15 a day) to 5.3 per cent, the World Bank estimates. 1. Recently, the United Nations Development Programme (UNDP) released its latest Human Development Report (HDR) titled 'A matter of choice: People and possibilities in the age of AI.' The report shows how Artificial Intelligence (AI) could reignite development. 2. The report noted the widening gap in inequality between countries with low Human Development Index (HDI) scores and those with very high HDI scores for the fourth consecutive year, highlighting a stark reversal of a historical trend where such inequalities were decreasing. 3. HDI is composite index that measures average achievement in human development taking into account four indicators: life expectancy at birth (Sustainable Development Goal 3); expected years of schooling (SDG 4.3); mean years of schooling (SDG 4.4); and gross national income (GNI) per capita (2017 PPP$) (SDG 8.5). 4. In HDI 2025, Iceland is ranked first with an HDI of 0.972, while South Sudan is ranked last with an HDI of 0.388. 5. India shows steady upward movement in the HDI rankings, ranking 130 in the 2025 UNDP report. The country's HDI value rose from 0.676 in 2022 to 0.685 in 2023, placing India in the medium human development category and bringing it closer to the high human development threshold (HDI ≥ 0.700). Source: UNDP's HDR 2025 6. The report noted that India's HDI value has increased by over 53% since 1990, showing a growth faster than both the global and South Asian averages. The targeted social protection and welfare programmes, and economic growth are cited as reasons for the progress. 7. According to the report, India has been placed in a unique position globally as a rising AI powerhouse with the highest self-reported AI skills penetration. The report pointed out that 20 per cent of Indian AI researchers are now choosing to stay in the country – up from almost none in 2019. (1) Consider the following statements: 1. A Gini Index of 0 represents perfect equality, while an index of 100 implies perfect inequality. 2. The higher the Gini Index the more unequal the country. 3. The index is based on the difference between the Lorenz curve and the notion of a perfectly equal income distribution. How many of the statements given above is/are correct? (a) Only one (b) Only two (c) All three (d) None (2) Consider the following statements with reference to the Human Development Report: 1. The Human Development Report is published by World Bank. 2. India is in the medium human development category with an HDI value of 0.685. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 (Sources: Top 10 most equal countries in the world and India's rank in it, UNDP's HDR 2025) Subscribe to our UPSC newsletter. Stay updated with the latest UPSC articles by joining our Telegram channel – Indian Express UPSC Hub, and follow us on Instagram and X. 🚨 Click Here to read the UPSC Essentials magazine for June 2025. Share your views and suggestions in the comment box or at Roshni Yadav is a Deputy Copy Editor with The Indian Express. She is an alumna of the University of Delhi and Jawaharlal Nehru University, where she pursued her graduation and post-graduation in Political Science. She has over five years of work experience in ed-tech and media. At The Indian Express, she writes for the UPSC section. Her interests lie in national and international affairs, governance, economy, and social issues. You can contact her via email: ... Read More
