The method used to measure
inequality of income or wealth is the Gini Coefficient. It is a measure of
statistical dispersion developed by the Italian statistician Corrado Gini.
The Gini coefficient can range from 0 to 1 and is sometimes multiplied by
100 to range between 0 and 100.
A low Gini coefficient is indicative of a more equal distribution, with 0
corresponding to perfect equality. On the other hand, a higher Gini
coefficient suggests more unequal distribution, with 100 corresponding to
According to the worldwide United Nations survey, India had a Gini
coefficient of 0.325 in 1999-2000 (0.368 in 2004), while US had 0.408 in
2000. While Sweden had 0.230, China and Hong Kong lead the way with 0.525
in 2001. This shows that India has a long way to go in improving its level
of inclusive growth.
In order to obtain a better inclusive growth, the government is required
to improve India's Human Development Index (HDI). The Human Development
Index (HDI) is a summary composite index that measures a country's average
achievements in three basic aspects of human development: health,
knowledge, and income.
It was first developed by the late Pakistani economist Mahbub ul Haq with
the collaboration of the Nobel Laureate Amartya Sen and other leading
development thinkers for the first Human Development Report in 1990. It
was introduced as an alternative to conventional measures of national
development, such as level of income and the rate of economic growth. It
is published by the United Nations Development Programme (UNDP).
The HDI provides an alternative to the common practice of evaluating a
country's progress in development based on per capita Gross Domestic
Product (GDP). Currently India has an index of 0.609, while US has 0.950.
The top ranking countries of the world, according to their HDI are Iceland
(0.968), Norway (0.968), Canada (0.967) and Australia (0.965)
respectively. India in order to improve its HDI, has to ensure equality of
access and opportunities, productive employment of people; heighten the
available education, health and infrastructure facilities, and provide a
favorable environment for the smooth operation of state, entrepreneurial
and business activities.