Multidimensional Poverty Index: An Analysis of Recent Reports

Introduction: Recent findings from reports by NITI Aayog and the United Nations Development Programme shed light on the evolving landscape of poverty in India. The reports reveal a significant decrease in poverty percentages and highlight the impact of various poverty measurement methods. In this blog, we delve into the details of these reports and examine the complexities surrounding the multidimensional poverty index.

Positive Shift in Poverty Statistics

Progressive Trends

The NITI Aayog report presents a promising trend, showcasing a reduction in the percentage of the impoverished population from 25% in 2015-16 to 15% in 2019-21. Notably, around 135 million individuals emerged from poverty during this period. Similarly, the Global Multidimensional Poverty Index report of 2023 of the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative (OPHI) emphasizes a decline in the multidimensional poverty index from 27.5% in 2015-16 to 16.2% in 2019-21.

Continued Efforts

The commendable progress aligns with earlier estimations. The Global MPI 2018 reportacknowledges India’s substantial strides in poverty reduction over the years, highlighting a near halving of the multidimensional poverty rate from 2005/06 to 2015/16. This equated to over 271 million fewer impoverished individuals within a decade.

Measuring Multidimensional Poverty

Challenges and Considerations

While the reduction in poverty is evident, the methodology of measuring multidimensional poverty remains under scrutiny. The incorporation of non-income dimensions like education, health, and sanitation adds complexity to the assessment. The Expert Group’s reservations on using multiple indicators raise concerns about measurability, aggregation, and data availability.

Deprivation and Capabilities

The search for non-income dimensions of poverty stems from the “capabilities” approach, questioning the tight linkage between deprivation and privately purchased consumption. The complexity arises when aggregating indicators like child mortality and safe drinking water. It’s important to note that multidimensional poverty indicators supplement, rather than replace, consumption-based estimates.

Critiques and Diverse Perspectives

Multidimensional Indices: A Debate

Opinions on multidimensional indices vary. Srinivasan views public services as a valuable dimension of poverty but raises questions about collapsing diverse indicators into a single index. Critics argue that such indices may not accurately represent the multidimensional nature of poverty.

The Role of Income

The perception of poverty is often tied to income levels. While non-income indicators reflect inadequate income, defining poverty based on income or consumption remains relevant. Income-focused measurements are well-established and widely used across nations.

Future Perspectives

The absence of official data on consumption expenditure post-2011-12 hinders direct comparisons with multidimensional poverty indices. It is essential to wait for consumption expenditure survey results for a comprehensive analysis. Furthermore, addressing discrepancies in aggregate consumption estimates between National Accounts Statistics (NAS) and NSS data is crucial.

Public Expenditure Impact

Supplementing consumption surveys with an exploration of public expenditure’s impact on health and education provides a comprehensive understanding of poverty dynamics across different expenditure classes.

Conclusion

As India continues to make strides in reducing poverty, understanding the nuances of multidimensional poverty measurement is paramount. While multidimensional indices offer valuable insights, they should complement, not replace, consumption-based estimates. The ongoing refinement of survey methodologies and the integration of various indicators will contribute to a more comprehensive understanding of poverty and its implications.

Other Reports: Shipri Report, Security Council, Indian State of Forest Report, Export Preparedness Inde x, Committee Report, World Investment Report, Gender Gap Report, State of Elementary Education Report Rural India, UN Report on Women Impowerment, Fish Disease