Multidimensional Poverty Index(MPI): 41.5 crore Indians exited multidimensional poverty since 2005-06

Source: The post is based on the article “41.5 crore Indians exited multidimensional poverty since 2005-06” published in The Hindu on 18th October 2022.

What is the News?

The Global Multidimensional Poverty Index(MPI) 2022 has been released.

What is the Multidimensional Poverty Index(MPI)?

Multidimensional Poverty Index(MPI) is jointly produced by UNDP and the Oxford Poverty and Human Development Initiative(OPHI).

Purpose: It is a key international resource that measures acute multidimensional poverty across more than 100 developing countries.

– It complements traditional monetary poverty measures by capturing the acute deprivations in health, education, and living standards that a person faces simultaneously.

Parameters: MPI constructs a deprivation profile of each household and person through 10 indicators spanning health, education and standard of living. All indicators are equally weighted within each dimension. 

The global MPI identifies people as multidimensionally poor if their deprivation score is 1/3 or higher.

Calculation: The MPI is calculated by multiplying the incidence of poverty and the average intensity of poverty. The MPI ranges from 0 to 1, and higher values imply higher poverty. 

– By identifying who is poor, the nature of their poverty (their deprivation profile) and how poor they are (deprivation score), the global MPI complements the international $1.90 a day poverty rate, which was revised by the World Bank last month to $2.15 per day.

What are the key findings of the MPI 2022?

Globally: Out of the total 610 crore people across 111 developing countries, 19.1% or 120 crores live in multidimensional poverty. Nearly half of them live in severe poverty.

India: The incidence of poverty fell from 55.1% in 2005/06 to 16.4% in 2019/21 in the country.

– As many as 41.5 crore people exited poverty in India during the 15-year period between 2005-06 and 2019-21, out of which two-thirds exited in the first 10 years and one-third in the next five years.

– Improvement in MPI for India has also significantly contributed to the decline in poverty in 

South Asia and it is for the first time that it is not the region with the highest number of poor people at 38.5 crores compared with 57.9 crores in Sub-Saharan Africa.

– Bihar, the poorest State in 2015/2016 saw the fastest reduction in MPI value in absolute terms. The incidence of poverty there fell from 77.4% in 2005/2006 to 52.4% in 2015/2016 to 34.7% in 2019/2021. 

– However, still India has by far the largest number of poor people worldwide at 22.8 crores, followed by Nigeria at 9.6 crores. Two-thirds of these people live in a household in which at least one person is deprived of nutrition. 

Note: The report doesn’t fully assess the effects of the COVID-19 pandemic on poverty in India as 71% of the data from the National Family Health Survey-5 (2019-2021) relied upon for MPI were collected before the pandemic.