India's Multidimensional Poverty Index (MPI)

The NITI Multidimensional Poverty Index (MPI) is a good beginning. An update.

India's Multidimensional Poverty Index (MPI)

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• The story: The NITI Aayog released the Multidimensional Poverty Index (MPI) 2021. The "Global Multidimensional Poverty Index 2021" was earlier released by the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative (OPHI). This is India's own MDPI now.
• Details of NITI's MPI: This new MPI seeks to measure poverty across its multiple dimensions and in effect complements existing poverty statistics based on per capita consumption expenditure. According to Global MPI 2021, India’s rank is 66 out of 109 countries. The National MPI 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.

1. It has three equally weighted dimensions – health, education, and standard of living. These three are represented by 12 indicators such as nutrition, school attendance, years of schooling, drinking water, sanitation, housing, bank accounts among others.
2. The national MPI measure uses the globally accepted and robust methodology developed by the Oxford Poverty and Human Development Initiative (OPHI) and the UNDP.
3. This baseline report of the national MPI measure is based on the reference period of 2015-16 of the National Family Health Survey (NFHS-4).
4. The NFHS-4 data has been used to derive an idea of baseline multidimensional poverty to know the situation on ground before the full rollout of various central government schemes.
5. The NFHS-4 precedes the full roll out of (central government’s) flagship schemes on housing, drinking water, sanitation, electricity, cooking fuel, financial inclusion, and other major efforts towards improving school attendance, nutrition, mother and child health, etc.

• Improving situation: The NFHS-5 data suggests improvement in access to clean cooking fuel, sanitation, and electricity which translates to reduction in deprivation.
• Latest learning: The disparity across states is remarkably high.

1. Poverty Levels - Bihar has the highest proportion of people of the state’s population followed by Jharkhand and Uttar Pradesh who are multidimensionally poor. Kerala registered the lowest population poverty levels, followed by Puducherry, Lakshadweep, Goa and Sikkim.
2. Malnourished People - Bihar also has the highest number of malnourished people followed by Jharkhand, Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.

• Importance: The government will benefit in policymaking if this data is rationally used.

1. Contribution towards Instituting Public Policy Tool - The development of the Index is an important contribution towards instituting a public policy tool which monitors multidimensional poverty, informs evidence-based and focused interventions, thereby ensuring that no one is left behind.
2. Presents Overall Picture - This presents an overall picture of poverty in the country, while also enabling closer and more in-depth analyses of areas of interest such as regions – state or districts, and specific sectors and complements the existing monetary poverty statistics.
3. Help Achieving SDGs - It is a contribution towards measuring progress towards target 1.2 of the Sustainable Development Goals (SDGs) which aims at reducing “at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions.

• EXAM QUESTIONS: (1) Explain the need for a new MPI index by NITI Aayog. (2) What is poverty? How can it be structurally removed? Explain.

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