Recently, A discussion paper by NITI Aayog, Multidimensional poverty in india since 2005-06, found that multidimensional poverty declined to 11.28 per cent in 2022-23 from 29.17 per cent in 2013-14
- This implies 248.2 million people have escaped poverty in the nine-year period.
About Multidimensional Poverty Measure (MPM)
- Poverty: According to the World Bank, Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity.
- Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.
- Multidimensional Poverty Measure (MPM): It seeks to understand poverty beyond monetary deprivations (which remain the focal point of the World Bank’s monitoring of global poverty) by including access to education and basic infrastructure along with the monetary headcount ratio at the $2.15 international poverty line.
- Alkire Foster (AF) Methodology: In 2010, the Multidimensional Poverty Index (MPI), developed by Sabina Alkire and James Foster, was adopted by the United Nations Development Programme (UNDP) in their Human Development Report. It captures overlapping deprivations in health, education and living standards (UNDP, 2010).
- Multidimensional Poverty Index: An index that measures the percentage of households in a country deprived along three dimensions – Monetary poverty, Education, and Basic infrastructure services – to capture a more complete picture of poverty
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National Multidimensional Poverty Index
- About: NITI Aayog in collaboration with United Nations Development Programme (UNDP), and Oxford Poverty and Human Development Initiative (OPHI) developed the National Multidimensional Poverty Index (MPI) that offers a multi-dimensional perspective on poverty.
- It complements income poverty measurements because it measures and compares deprivations directly.
- Various Level: The National MPI is a robust, and nuanced public policy tool that can be used to monitor multidimensional poverty at the national, state, and district levels in India.
- Sustainable Development Goals (SDGs): India’s National MPI is a contribution towards measuring progress for target 1.2 of the Sustainable Development Goals (SDGs) that aims to reduce “at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions” by 2030.
- Methodology: The dual cut-off Alkire-Foster (AF) methodology – the one used in the Global MPI Report – was considered suitable for the national context.
Dual Cutoffs
- It involves two cutoffs – a poverty cutoff (defining what it means to be poor in each dimension) and a dimensional cutoff (determining how many dimensions a person must be deprived in to be considered multidimensionally poor).
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- MPI captures broad qualitative aspects of people’s life across 3 dimensions – Health, Education, and Standard of living.
- 2 new indicators: The national MPI largely follows the global methodology. India’s national MPI retained 10 indicators from the Global MPI and has added 2 new indicators, namely Maternal Health (in the dimension of Health) and Bank Account (in the dimension of Standard of Living).
Computing the MPI
- Building a deprivation profile for each household: Each household is assigned a deprivation score based on its deprivation in each of the 12 indicators.
- Identifying the poor: If the deprivation score of a household is above 33%, they are multidimensionally poor.
- Indices of MPI:
- Headcount ratio (H): How many are poor?
- Proportion of multidimensionally poor in the population, which is arrived at by dividing the number of multidimensionally poor persons by total population.
- Intensity of poverty (A): How poor are the poor?
- Average proportion of deprivations which is experienced by multidimensionally poor individuals. To compute intensity, the weighted deprivation scores of all poor people are summed and then divided by the total number of poor people.
- Formulae: MPI is arrived at by multiplying headcount ratio (H) and intensity of poverty (A).
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How Did India Reduce Multidimensional Poverty So Fast?
- Areas of reduction: India achieved such rapid poverty reduction lies in the data about the seven standard-of-living sub-indicators— cooking fuel, sanitation, drinking water, housing, electricity, assets, and bank accounts— rather than in the indicators for health and education.
- For instance, the National Multidimensional Poverty Index: A Progress of Review 2023′ by NITI Aayog report shows that 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, electricity deprivation went from 12 per cent to 3.27 per cent, and the percentage of people lacking access to banking reduced from 9.66 percent to 3.69 per cent.
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Government Initiatives For Poverty Alleviation
- Health: Flagship programmes like the Poshan Abhiyan and Anaemia Mukt Bharat have contributed to reduced deprivations in health.
- Sanitation: Initiatives such as Swachh Bharat Mission (SBM) and Jal Jeevan Mission (JJM) have improved sanitation across the country.
- The impact of these efforts is evident in the swift 21.8 percentage points improvement in sanitation deprivations.
- Cooking fuel : The provision of subsidized cooking fuel through the Pradhan Mantri Ujjwala Yojana (PMUY) has positively transformed lives, with a 14.6 percentage points improvement in cooking fuel deprivations.
- Other Initiatives: Like Saubhagya, Pradhan Mantri Awas Yojana (PMAY), Pradhan Mantri Jan Dhan Yojana (PMJDY), and Samagra Shiksha have also played a major role in significantly reducing multidimensional poverty in the country.
- Pradhan Mantri Awas Yojana (PMAY): To provide affordable housing for all by the year 2022. The scheme aims to address the housing shortage among the economically weaker sections, low-income groups, and middle-income groups.
- Pradhan Mantri Jan Dhan Yojana (PMJDY): To provide universal access to banking facilities, with at least one basic banking account for every household. The scheme also aims to promote financial inclusion by providing access to financial services like savings accounts, credit, insurance, and pension.
- Rural Employment Generation Programme (REGP): Implemented by The Khadi and Village Industries Commission;. One can get financial assistance in the form of bank loans to set up small industries.
- Prime Minister Rozgar Yojana (PMRY): The educated unemployed from low-income families in rural and urban areas can get financial help to set up any kind of enterprise that generates employment.
- Mahatma Gandhi National Rural Employment Guarantee Act: Adult volunteers can do unskilled manual work for a minimum of 100 days in a year.
- Swarnajayanti Gram Swarozgar Yojana (SGSY): Now has been restructured as National Rural Livelihoods Mission (NRLM)
- The Government provides partial financial assistance to SHGs which then decide whom the loan is to be given to for self-employment activities.
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August 9, 2024
