What’s in the news?
- NITI Aayog has released its first-ever Multidimensional Poverty Index (MPI).
About the Index
- 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.
Highlights of 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%).
Significance of the Index
- 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.