• Bihar, Jharkhand and Uttar Pradesh have emerged as the poorest states in India, according to NITI Aayog’s first Multidimensional Poverty Index (MPI) report.

• As per the index, 51.91 per cent population of Bihar is poor, followed 42.16 per cent in Jharkhand, 37.79 per cent in Uttar Pradesh. While Madhya Pradesh (36.65 per cent) has been placed fourth in the index, Meghalaya (32.67 per cent) is at the fifth spot.

• Kerala (0.71 per cent), Goa (3.76 per cent), Sikkim (3.82 per cent), Tamil Nadu (4.89 per cent) and Punjab (5.59 per cent) have registered the lowest poverty across India.

History of poverty estimation in India

• The history of poverty estimation in India dates back to as early as 1901 when Dadabhai Naoroji estimated poverty in the country based on the cost of a subsistence diet. 

• In 1938, the National Planning Committee suggested a poverty line estimation based on living standards followed by the authors of the Bombay Plan in 1944. 

• Addressing and ending poverty has been part of the national agenda since Independence. 

• Various committees, working groups and scholars including the working group of 1962, Dandekar and Rath in 1971 and the Y.K. Alagh taskforce in 1979 were engaged in estimating the headline statistic of poverty to inform public policy. 

• Similarly, expert groups under Lakdawala (1993) and Tendulkar (2009) and the Rangarajan Committee (2014) undertook the exercise of estimating monetary poverty. 

• Globally, the focus on reducing monetary poverty was mirrored in the Millennium Development Goals target of halving the proportion of people living on less than $1.25 a day between 1990 and 2015.

• The adoption of ‘Transforming our world: the 2030 Agenda for Sustainable Development’ by 193 countries of the United National General Assembly, including India, brought institutionalised focus in measuring, and addressing poverty in “all its forms” enshrined in its preamble and explicated under Goal 1.

What is MPI?

• MPI as a measure was first developed by Oxford Poverty and Human Development Initiative (OPHI) and United Nations Development Programme (UNDP) for inclusion in UNDP’s flagship Human Development Report in 2010, where it has been since published.

• According to Global MPI 2021, India’s rank is 66 out of 109 countries. The National MPI Project is aimed at deconstructing the Global MPI and creating a globally aligned and yet customised India MPI for drawing up comprehensive Reform Action Plans with the larger goal of improving India’s position in the Global MPI rankings.

• NITI Aayog was identified as the nodal agency for the Multidimensional Poverty Index (MPI).

• To institutionalise inter-ministerial effort for developing the national MPI and formulating reform areas and actions, the Multidimensional Poverty Index Coordination Committee (MPICC) was constituted by NITI Aayog, which included 12 ministries and departments.

• While this report is an indispensable first step in mainstreaming MPI, it is based on a dataset which is five years old — NFHS-4 (2015-16).

• The national MPI, an aggregate measure which defines poverty, in simple terms, as the deprivation in crucial and basic parameters of health, education, and living standards, is a significant departure from the way poverty has been understood and conceptualised historically. 

• This shift in focus from income or consumption expenditure as the basis of poverty estimation is founded on the policy narrative at the national level that human and capability development along with access to basic infrastructure is at the centre of India’s development policy.

• Estimates of national MPI headcount ratio and intensity have been furnished not only for the country and states but also for all the districts.

Indicators in India’s National MPI

• The national MPI model retains the ten indicators of the global MPI model, essentially to be closely aligned to the global methodology and rankings. 

• India’s MPI has three equally weighted dimensions — health, education, and standard of living —  which are represented by 12 indicators.

They are:

1) Health: Nutrition, Child & Adolescent Mortality, Antenatal Care

2) Education: Years of Schooling, School Attendance

3) Standard of Living: Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Ownership of Assets, Bank Account.

What is the significance of National MPI?

• This baseline National MPI report and dashboard is a landmark first step in bringing multidimensional poverty as a tool to the policy table at the national and sub-national levels in India. It is expected that the report will play an instrumental role in sensitising government, researchers, civil society, citizens, and other stakeholders on the need for and importance of MPI as a powerful policy instrument.

• At the higher levels, MPI could be used as an input to the design of development policies schemes, budget allocations, and target setting. At the lower levels, for instance, of district, MPI could decide priority of execution and delivery. With every revision of MPI based on new survey data, actions could be redesigned to shift focus to those who need it the most.

Other key points in MPI:

• As per the index, 51.91 per cent population of Bihar is poor, followed by 42.16 per cent in Jharkhand and 37.79 per cent in Uttar Pradesh. While Madhya Pradesh (36.65 per cent) has been placed fourth in the index, Meghalaya (32.67 per cent) is at the fifth spot.

• Among Union Territories, Dadra and Nagar Haveli (27.36 per cent), Jammu & Kashmir, and Ladakh (12.58), Daman & Diu (6.82 per cent) and Chandigarh (5.97 per cent), emerged as the poorest UTs. Puducherry having 1.72 per cent of its population as poor, Lakshadweep (1.82 per cent), Andaman & Nicobar Islands (4.30 per cent) and Delhi (4.79 per cent) have fared better.

• As the data period for the NFHS-4 is 2015-16, the estimates for the present Union Territories of Jammu & Kashmir and Ladakh have been computed for their combined geographical region.

• Bihar has the highest number of malnourished people followed by Jharkhand, Madhya Pradesh, Uttar Pradesh and Chhattisgarh.

• Bihar is also the worst performer when it comes to percentage of population deprived of maternal health, percentage of population deprived of years of schooling, school attendance and percentage of population deprived of cooking fuel and electricity.

• Uttar Pradesh ranked the worst in child and adolescent mortality category, followed by Bihar and Madhya Pradesh, while Jharkhand performed the worst when it comes to percentage of population deprived of sanitation, followed by Bihar and Odisha.

Manorama Yearbook app is now available on Google Play Store and iOS App Store