Consider the following statements: 1. Gini Index is a graphical representation of the distribution of income or of wealth. 2. Higher the Gini Index, the greater the degree of income equality. 3. The value of Gini Index has increased amongst regular workers while it decreased among casual workers in India as per India Wage Report. Which of the statement(s) given above is/are correct?

Official answer key: this question is marked X, with no answer letter. The answer shown above (C) is the academy’s own.

• The Gini Index (or Gini Coefficient) is a statistical measure used to quantify income or wealth inequality within a population. It provides a way to gauge how income or wealth is distributed among individuals or households. Hence, statement 1 is correct.
• The Gini Index measures inequality in a distribution, such as income or wealth, within a specific population. It ranges from 0 to 1 (or from 0% to 100% in percentage terms).
• A Gini Index of 0 represents perfect equality, where everyone has the same income or wealth.
• A Gini Index of 1 (or 100%) represents perfect inequality, where all income or wealth is held by a single individual or household.
• It is derived from the Lorenz Curve, which plots the cumulative share of income or wealth against the cumulative share of the population.
• Lower Gini Index: Indicates a more equal distribution of income or wealth.
• Higher Gini Index: Indicates greater inequality, where income or wealth is more unevenly distributed. Hence, statement 2 is correct.
• The India Wage Report published by the International Labour Organization (ILO) and other sources provides insights into wage dynamics and inequality in India. According to the report:
• The Gini Index has increased among regular workers, indicating a rise in income inequality within this group. The rise in the Gini Index among regular workers indicates that income inequality is growing within this group. This could be due to factors like wage disparities, differences in job security, and variations in benefits and compensation among regular workers.
• Conversely, the Gini Index has decreased among casual workers, suggesting a reduction in income inequality within this group. The decrease in the Gini Index among casual workers suggests a reduction in income inequality within this group. This might be attributed to improved wage rates or better distribution of income among casual workers, although casual work is often characterized by lower and more variable wages compared to regular employment.
• Hence, statement 3 is correct.