Poor no longer? Dimensions of poverty in India

Source: The post is based on the article “Poor no longer? Dimensions of poverty in India”  published in Livemint on 19th July 2023

What is the News?

Niti Aayog has published the second edition of National Multidimensional Poverty Index: A progress of Review 2023.

What is Multidimensional Poverty(MDP)?

Historically, poverty estimation was done by largely focusing on income as the sole indicator. 

However, there was criticism that monetary and consumption-based poverty measures fail to capture the impact of lack of other non-monetary factors on standard of living. 

Niti Aayog’s National Multidimensional Poverty Index is modeled on the Global Multidimensional Poverty Index. It captures overlapping deprivations in health, education and living standards.

Niti Aayog published the first National MPI baseline report for India in 2021.

How do we measure Multidimensional Poverty(MDP)?

National MPI divides these three broad indicators health, education and living standards into further dimensions. 

For instance, health includes nutrition, child-adolescent mortality and maternal health, while education considers years of schooling and school attendance.

All these indicators are weighed in to calculate the ‘deprivation score’. The deprivation score is the sum of the weighted status of all the indicators for an individual.

If the deprivation score is more than 0.33, then an individual is considered multidimensionally poor.

What are the key findings of National Multidimensional Poverty(MDP) 2023?

Source: Niti Aayog

A quarter of Indians were multidimensionally poor in 2015-16 which fell to 15% in 2019-21.

The decline was the highest in Bihar (51.9% to 33.8%), Madhya Pradesh (36.6% to 20.6%) and Uttar Pradesh (37.7% to 22.9%). 

The southern states were already doing well, so their decline was tiny. Kerala had the lowest share of MDP persons: 0.55%.

The number of MDP Indians dropped by an estimated 135 million — that’s 10% point drop over the five years.

Note: The global MPI has estimated India’s MDP shares at 27.7% for 2015-16 and 16.4% for 2019-21.

Click Here to read more

How did India reduce multidimensional poverty so fast?

India achieved such rapid poverty reduction due to improvement in seven standard-of-living sub-indicators— cooking fuel, sanitation, drinking water, housing, electricity, assets, and bank accounts.

For instance, around 58 percent of Indians were deprived of clean cooking fuel in 2015-16, but by 2019-2021, it was only 44  per cent.

Similarly, the percentage of individuals lacking adequate sanitation facilities dropped from 51.88 per cent to 30.13 per cent.

However, when it comes to indicators like health and education, the reduction has not been so slow.