Economy

Gini coefficient

Also: Gini index, Gini

Definition

The Gini coefficient is a summary measure of inequality in the distribution of income, consumption or wealth, ranging from 0 (perfect equality, everyone has the same) to 1 (perfect inequality, one person has everything). It is often expressed as a percentage or index from 0 to 100.

Summary card: Gini coefficient. Developed by Italian statistician Corrado Gini in 1912. Based on the Lorenz curve: Gini equals the area between the line of equality and the Lorenz curve, divided by the total area under the line of equality. India's consumption Gini, based on household consumption surveys, is around 0.25–0.30 in recent estimates. Income and wealth Ginis are typically much higher than consumption Ginis. The World Bank reports Gini indices for most countries — Summary card © UPSCPrep.in

Background and evolution

International comparisons should be made carefully. South Africa and Brazil have among the highest income Ginis, often above 0.5, while Nordic countries are among the lowest, around 0.25–0.3 after taxes and transfers. Many rich countries have high market income inequality but reduce it substantially through redistribution, which is why economists distinguish between Gini before and after taxes and transfers.

Average figures such as GDP per capita tell us how much a country produces per person, but not how it is shared. Two countries with the same average income can have very different levels of poverty and social tension depending on distribution. The Gini coefficient compresses the entire distribution into one number, making it easy to compare countries and track changes over time.

The idea is simple when drawn. Arrange the population from poorest to richest and plot the cumulative share of income held by the bottom 10%, 20% and so on. This is the Lorenz curve. If everyone had the same income, it would be a straight diagonal line. The more the curve sags below the diagonal, the more unequal the distribution and the higher the Gini. This page explains how to read and interpret the Gini, especially for India, where debates over inequality data are lively.

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Last reviewed: 23 October 2026 · Original UPSCPrep.in content.