Status of multidimensional Poverty in India

Source: The post status of multidimensional Poverty in India has been created, based on the article “Multiple-count poverty: Let’s try to eliminate it” published in “Live mints” and “Development debate: The policy must now go beyond poverty numbers” published in ““Business standard” on 17th January 2024.

UPSC Syllabus Topic: GS Paper 2 – governance – mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

News: As per the NITI Aayog discussion paper titled ‘Multidimensional Poverty in India since 2005-06’, approximately 248.2 million individuals in India emerged from poverty over nine years. It also addresses the challenges encountered in tackling multidimensional poverty.

What is multidimensional poverty?

Historically, poverty estimation was done by mainly focusing on one-dimensional measures – usually based on income. 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.

It has been recognized that poverty has multiple dimensions that affect individuals’ experiences and quality of life. Qualitative aspects of life such as access to basic services like water and sanitation that may not be directly related to household income, constitute an important part of poverty measurement.

For more information on multidimensional poverty read here

For information on National multidimensional Poverty read here

What is the status of multidimensional Poverty in India?

Multidimensional poverty in India has substantially decreased.

In 2013-14, 29.2% of the population was in multidimensional poverty, which dropped to 11.3% in 2022-23.

Approximately 248.2 million people have escaped extreme poverty since 2013.

Niti Aayog’s data shows a decline in poverty from 55.3% in 2005-06 to an anticipated level below 10% by 2024.

Similarly, World Bank figures indicate a drop in India’s poverty rate from roughly 19% in 2015 to 11.9% in 2021.

The Indian government’s goal is to further reduce this poverty metric to 1%.

For more information read here

How did India achieve this reduction in multidimensional poverty?

Digital Integration: The ‘JAM’ trio – Jan Dhan accounts, Aadhaar identities, and mobile phones – played a crucial role in streamlining welfare distribution.

Direct Cash Transfers: These transfers ensured efficient coverage of various benefit schemes, reducing leakages significantly.

Expanded Welfare Budgets: Economic growth enabled increased funding for welfare programs, contributing to poverty alleviation.

Targeted Measures: Focused efforts on health, education, and living standards addressed key aspects of deprivation.

Multidimensional Approach: Adoption of the multidimensional poverty index (MPI), similar to the United Nations Development Program’s method, helped in better targeting and measuring poverty.

Data-Driven Decisions: Use of National Family Health Surveys for accurate assessment and strategy formulation.

What are the challenges in countering multidimensional poverty?

Data Quality Concerns: The rejection of the 2017-18 consumer expenditure survey by the government due to data quality issues highlights challenges in obtaining reliable data.

Regional Disparities: There are significant disparities in poverty levels across different states, indicating uneven development and the need for region-specific policies.

Educational Outcomes: The index includes education but does not fully address the quality of education. For example, the learning outcomes in India are not at the desired level.

Policy Direction and Spending: The report questions the efficiency of current government expenditure, such as free food distribution and cash transfers, suggesting a need for more focused spending on development areas like education quality.

Way forward

To further reduce poverty, India needs sustained economic growth and targeted policies for inclusive development. Accurate data collection and a shift in government spending towards areas like education quality are crucial. Addressing regional disparities and focusing on not just the quantity but also the quality of services will aid in balanced and inclusive progress.

Question for practice:

Examine how India achieved a substantial reduction in multidimensional poverty and the challenges it faces in countering this issue.