{"id":256317,"date":"2023-08-16T20:33:58","date_gmt":"2023-08-16T15:03:58","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=256317"},"modified":"2023-08-29T13:01:59","modified_gmt":"2023-08-29T07:31:59","slug":"consumption-based-poverty-estimates-have-relevance","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/consumption-based-poverty-estimates-have-relevance\/","title":{"rendered":"Consumption-based poverty estimates have relevance"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cConsumption-based poverty estimates have relevance\u201d <\/strong>published in \u201cThe Hindu\u201d <\/strong>on 16th August 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS2- Issues related to Poverty<\/p>\n

Relevance:<\/strong> Measurement of poverty<\/p>\n

News<\/strong>– A recent report by NITI Aayog on multidimensional poverty shows that the percentage of the poor has gone down from 25% in 2015-16 to 15% in 2019-21 and around 135 million people were lifted out of poverty during this period.<\/p>\n

What is the comparison of poverty estimation of Multidimensional Poverty Index and survey based on consumption expenditure?<\/strong><\/h2>\n

As per the report of the Global Multidimensional Poverty Index 2018<\/strong>, India has made significant progress<\/strong> in reducing multidimensional poverty.<\/p>\n

The prevalence of multidimensional poverty witnessed a reduction of nearly 50% between 2005-06 and 2015-16<\/strong>. It dropped to 27.5%<\/strong>. In the last decade, the count of poor individuals in India decreased by over 271 million.<\/strong><\/p>\n

The calculations of poverty based on methodology recommended by the Tendulkar committee <\/strong>reveal that the number of individuals living in poverty decreased by 137 million between 2004-05 and 2011-12<\/strong>.<\/p>\n

According to the approach suggested by the Rangarajan Committee<\/strong>, the reduction between 2009-10 and 2011-12 amounts to 92 million<\/strong>. It means an annual reduction of 46 million<\/strong>. Over a decade, this reduction surpasses the global Multidimensional Poverty Index.<\/p>\n

In terms of absolute figures<\/strong>, the poverty rates calculated using the Tendulkar and Rangarajan Committee <\/strong>methods are lower than those estimated by the global MPI.<\/p>\n

What are issues with the multidimensional poverty index?<\/strong><\/h2>\n

As per Expert Group to review the Methodology for Measuring Poverty (2014)<\/strong>, there are issues regarding the use of multiple indicators. <\/strong><\/p>\n

It is due to the various complexities like measurement challenges, the need for aggregation across indicators, and the availability of suitable data<\/strong> at reasonably frequent intervals.<\/p>\n

These matters should be scrutinized and evaluated. For example, the child mortality indicator<\/strong> is calculated for a population group rather than individual households. So, aggregation of the 2 types of data is difficult.<\/strong><\/p>\n

Ideally, these indicators should remain distinct. For instance, an indicator like access to safe drinking water shouldn’t be combined with an indicator like child mortality.<\/p>\n

It’s entirely possible to analyse the non-income indicators<\/strong> like education, health, sanitation, alongside income or consumption poverty. But transforming all these indicators into a single index<\/strong> presents numerous challenges.<\/p>\n

For most individuals, wealth or poverty is associated with income levels. <\/strong>The various non-income poverty indicators<\/strong> fundamentally reflect insufficient income. <\/strong><\/p>\n

Defining poverty in terms of income<\/strong> or, when income data is unavailable, in terms of expenditure<\/strong>, appears most suitable. This is the method followed by most countries.<\/strong><\/p>\n

Official data on consumer expenditure <\/strong>beyond 2011-12 is lacking. It makes it difficult to compare trends with the multidimensional poverty index<\/strong>. The consumption expenditure survey <\/strong>conducted in 2017-18 has not been officially released.<\/p>\n

In the absence of such data, several studies have been conducted on poverty using indirect methods and data sources <\/strong>like the CMIE and PLFS<\/strong>. It results in varying conclusions.<\/p>\n

What should be done?<\/strong><\/h2>\n

Past surveys have clearly demonstrated a substantial decrease in the poverty ratio<\/strong> during periods of robust economic growth. However, in recent years, including the period affected by the COVID-19 pandemic, the growth rate <\/strong>has diminished.<\/p>\n

It’s reasonable to suspect that the rate at which the poverty ratio<\/strong> is decreasing may have slowed down.<\/p>\n

The current consumption expenditure survey<\/strong> is going on. To ensure consistency for comparison purposes, it’s advisable to adopt a single methodology.<\/strong> Hence, awaiting the publication of the survey results is the most prudent course <\/strong>of action.<\/p>\n

It is crucial to complement the outcomes of consumption surveys <\/strong>with an examination of the influence of public expenditure<\/strong> on health and education.<\/p>\n

The disparity in aggregated consumption<\/strong> estimates between the National Accounts Statistics (NAS) and the NSS data<\/strong>. Such disparities are not unique to India.<\/p>\n

This discrepancy in India<\/strong> has been widening over time. It has escalated to 53.1% in 2011-12.<\/p>\n

The National Statistical Office should investigate this issue and propose potential measures<\/strong> to enhance data collection<\/strong> through both avenues.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cConsumption-based poverty estimates have relevance\u201d published in \u201cThe Hindu\u201d on 16th August 2023. Syllabus: GS2- Issues related to Poverty Relevance: Measurement of poverty News– A recent report by NITI Aayog on multidimensional poverty shows that the percentage of the poor has gone down from 25% in 2015-16… Continue reading Consumption-based poverty estimates have relevance<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,8131],"class_list":["post-256317","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-social-issues","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/256317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=256317"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/256317\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=256317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=256317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=256317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}