A record 13.5 crore people moved out of multidimensional poverty between 2015-16 and 2019-21, according to the report ‘National Multidimensional Poverty Index: A Progress Review 2023’ released by NITI Aayog.

• According to the latest update of the global MPI released by UNDP and OPHI at the University of Oxford, a total of 415 million people moved out of poverty in India within just 15 years from 2005-2006 to 2019-2021.

Key points of National Multidimensional Poverty Index:

• India has registered a significant decline of 9.89 percentage points in the number of India’s multidimensionally poor from 24.85 per cent in 2015-16 to 14.96 per cent in 2019-2021.

• The report states that the fastest reduction in the proportion of multidimensional poor was observed in Uttar Pradesh, Bihar, Madhya Pradesh, Odisha and Rajasthan.

• Between 2015-16 and 2019-21, the MPI value nearly halved from 0.117 to 0.066 and the intensity of poverty reduced from 47 per cent to 44 per cent.

• While rural areas witnessed the fastest decline in poverty from 32.59 per cent to 19.28 per cent, urban areas saw a reduction in poverty from 8.65 per cent to 5.27 per cent.

• All 12 parameters of the MPI have shown marked improvements.

• Progress in nutrition, years of schooling, sanitation, and cooking fuel has been the significant contributor to the decline in MPI value though there is further scope to make improvements.

Impact of targeted policies, schemes

• Designing effective strategies to rapidly reduce poverty is a challenging – yet possible – process. Over time, multiple policies and programmes have defined India’s deliberate and determined progress on poverty reduction.

• India’s stellar progress on the national MPI between 2015-16 and 2019-21 reflects the government’s commitment to improving the quality of people’s lives – through targeted policies, schemes, and developmental programmes rolled out at both the national and sub-national levels.

• The Economic Survey 2022-23 notes the role played by government schemes including the Pradhan Mantri Awas Yojana (PMAY), Jal Jeevan Mission (JJM), Swachh Bharat Mission (SBM), Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), Pradhan Mantri Ujjwala Yojana (PMUY), Pradhan Mantri Jan Dhan Yojana (PMJDY), POSHAN Abhiyaan, Samagra Shiksha among others in enhancing overall quality of life of people in India.

What is the significance of national MPI?

• The 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs) address the economic, environmental, and social aspects of societal well-being and are focused on the core principle of “leaving no one behind”.

• When individuals face deprivations or disadvantages due to limited choices and opportunities, they tend to be left behind, unable to benefit much from economic growth, innovation, or globalisation. Therefore, identifying and empowering such vulnerable sections of the population becomes essential for effective poverty reduction. 

• SDG 1 aims to eradicate poverty in all forms and dimensions – using measures that include and go beyond income. 

• SDG target 1.2 aims to reduce by 2030 “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”.

• The development and understanding of the multidimensional poverty measure is important for policy design and formulation. Not only does it provide insights into the distribution of poverty within a country, it also delineates the contribution of each indicator to multidimensional poverty.

• In this context, a national Multidimensional Poverty Index (MPI) for India enables estimation of multidimensional poverty at the national, state, and district levels. 

• The district-wise estimation of the national MPI can be used for reaching out to the furthest behind first, through targeted interventions.

Methodology

• Historically, poverty estimation has predominantly relied on income as the sole indicator. However, the Global Multidimensional Poverty Index (MPI), based on the Alkire-Foster methodology, captures overlapping deprivations in health, education, and living standards.

• NITI Aayog constituted an inter-ministerial MPI Coordination Committee (MPICC) including ministries and departments pertaining to areas such as health, education, nutrition, rural development, drinking water, sanitation, electricity, and urban development, among others. 

• It also included experts from the ministry of statistics and programme implementation (MoSPI) and technical partners – OPHI and UNDP. 

• The composition of the MPICC drew from the multidimensional nature of the indicators and sub-indicators within the index. This brought forth cross-sectoral perspectives on policies and interventions needed to improve achievements at the level of households.

• The second edition of the National MPI provides multidimensional poverty estimates for the 36 states and Union Territories, along with 707 administrative districts across 12 indicators of MPI. These estimates were computed using data from the 5th round of the NFHS conducted in 2019-21.

• The report follows Alkire-Foster methodology developed by its technical partners — the Oxford Poverty and Human Development Initiative (OPHI) and United Nations Development Programme (UNDP).

• Across three dimensions of health, education, and standard of living, India’s national MPI includes indicators on nutrition, child and adolescent mortality, maternal health, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, bank accounts and assets.

• The national MPI as a measure of multiple dimensions of poverty complements monetary poverty statistics and enables a close monitoring of individual indicators and dimensions which overlap with several SDGs. 

• It allows for disaggregation at the levels of states and districts and enables integrated, cross-sectoral policy actions by capturing simultaneous deprivations.

• Simple headcount ratios or poverty rates do not provide any insights on the depth of poverty. It is possible that while the number of poor individuals as captured by the headcount ratio reduce, the poorest may, in fact, get even poorer. 

• Alternatively, gains among the poor may be completely missed unless they cross the ‘poverty line’ or exit poverty. To address this, the Multidimensional Poverty Index, based on the Alkire-Foster methodology, presents not just the extent of poverty (the headcount ratio), but also the depth of poverty — captured by the ‘MPI value’ or the adjusted headcount ratio. 

• The MPI value is arrived at by multiplying the headcount ratio with the average deprivation score among the MPI poor.

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