Multidimensional Poverty Index

NITI Aayog has released its first-ever Multidimensional Poverty Index (MPI).

The MPI seeks to measure poverty across its multiple dimensions and in effect complements existing poverty statistics based on per capita consumption expenditure.
It has three equally weighted dimensions – health, education, and standard of living – which in turn are represented by 12 indicators such as nutrition, school attendance, years of schooling, drinking water, sanitation, housing, bank accounts among others.
The index is calculated by first setting the deprivation cut-offs for each indicator, i.e., the level of achievement considered normatively sufficient for an individual to be considered not deprived in an indicator.
For example, the individual has completed at least six years of schooling. Such a cut off would be applied to determine whether the individual is deprived in each indicator. Weights are added to each indicator and a composite metric is then used to calculate the index.

With more than 50% of the population in Bihar identified as “multidimensionally poor”, the State has the maximum percentage of population living in poverty among all the States and the Union Territories.
As per the index, 51.91% of the population in Bihar is poor, followed by Jharkhand (42.16%), Uttar Pradesh (37.79%), Madhya Pradesh (36.65%) and Meghalaya (32.67%).
On the other hand, Kerala registered the lowest poverty levels (0.71%), followed by Puducherry (1.72%), Lakshadweep (1.82%), Goa (3.76%) and Sikkim (3.82%).
Other States and Union Territories where less than 10% of the population is poor include Tamil Nadu (4.89%), Andaman & Nicobar Islands (4.30%), Delhi (4.79%), Punjab (5.59%), Himachal Pradesh (7.62%) and Mizoram (9.8%).

Measuring poverty has evolved globally over the years. The conventional method has been to specify a minimum income (or expenditure) required to purchase a basket of goods and services to meet basic needs.
It required defining a poverty line first, which the C Rangarajan committee had estimated in 2014 to be Rs 972 a month per person in rural areas and Rs 1,407 a month per person in urban areas, at 2011-12 prices.
The development of the National Multidimensional Poverty Index of India 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.
India’s national MPI measure uses the globally accepted and robust methodology developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP).
The district-wise estimation of the national MPI will also ensure reaching out to the furthest behind first through focused efforts on specific indicators and dimensions.

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