DATA Point

Poverty In India: A Progress Review

Context: Recently, the Prime Minister outlined that 13.5 crore plus people came out of poverty in 5 years.

Poverty in India

• Five official committees have so far estimated the number of people living in poverty in India. 
• Since 2021, India has abandoned the poverty line measure to opt for the Multidimensional Poverty Index. 

Poverty at the national level:

Poverty In India Estimates

Given the different ways poverty has been measured over the years, the available data is limited and conflicting. 

• For instance, while the NITI Aayog MPI said 53.7% (625 million) of Indians were poor in 2004-05, the global MPI put the figure at 55.1% (645 million). 
• According to the national and global MPIs, about 420 million and 415 million people escaped poverty between 2004-05 and 2019-21. 
• The Tendulkar Expert Group appeared to undercount the poor even more at 37.2% (408 million) in 2004-05.
• As per the Tendulkar Expert Group, between 2004-05 and 2011-12, about 138 million people were lifted from poverty.
• Arunachal Pradesh, Mizoram and Nagaland were the only states to see an increase in the poverty rate between 2004-05 and 2011-12. 
• During this period, nine states saw poverty decline by at least 20 percentage points.

How is poverty in India measured?

• India adopted the Multidimensional poverty index, with some modifications, in 2021. The national MPI is measured now by the NITI Aayog.
• After India switched to its version of the MPI, poverty data was published for 2015-16 and 2019-21 based on the NFHS data for the corresponding years. 
• In 2015-16, Bihar was again the only state with more than 50% of the population living in poverty. 
• In six states, more than a third of the population was poor. The proportion of poor people in eight states and UTs was below 5%.

Poverty In India: Post-Independence Poverty Estimation Methods: 

In 1962, the Planning Commission constituted a working group to estimate poverty nationally, and it formulated separate poverty lines for rural and urban areas – of Rs 20 and Rs 25 per capita per year, respectively.  (Refer to Table for more details.)

The Multidimensional Poverty Index (MPI)

• In 2010, the United Nations Development Programme and the Oxford Poverty and Human Development Initiative created the Multidimensional Poverty Index (MPI).
• It measures “acute deprivations in health, education, and living standards that a person faces simultaneously” in addition to income and expenditure levels.
• It includes outcome-based indicators like malnourishment, school attendance and years of schooling, and access to water, sanitation, electricity and cooking fuel.
• According to the global MPI, a person is considered poor if they are deprived of a third or more indicators.