13.5 Crore Indians move out of Multidimensional Poverty in Five Years: NITI Aayog Report

13.5 Crore Indians move out of Multidimensional Poverty in Five Years: NITI Aayog Report

Subject : Schemes

Concept :

• The NITI Aayog has published the second edition of the Multidimensional Poverty Index titled ‘National Multidimensional Poverty Index: A progress of Review 2023’.

Background:

• The Sustainable Development Goals (SDGs) represent a universal aspiration that unites all nations in their collective endeavour to foster an equitable and inclusive future.
• India has wholeheartedly embraced the SDGs, leaving no stone unturned in its successful realization.
• At the core of India’s priorities, lies SDG target 1.2, with its powerful mission to reduce poverty in all its forms by at least half by 2030.

What is Multidimensional Poverty?

• A person who is poor can suffer multiple disadvantages at the same time – for example they may have poor health or malnutrition, a lack of clean water or electricity, poor quality of work or little schooling.
• Focusing on one factor alone, such as income, is not enough to capture the true reality of poverty.
• Multidimensional Poverty is a measure of poverty that captures deprivations in education and access to basic infrastructure in addition to income or consumption at the USD 1.90 international poverty line (as per World Bank).

National Multidimensional Poverty Index (MPI):

• The MPI has been used by the United Nations Development Programme (UNDP) in its flagship Human Development Report since 2010.
• In this context, NITI Aayog had published the first edition of national Multidimensional Poverty Index for India in 2021.
• Purpose –
• A national MPI statistic for a country is tailored to the national priorities and therefore, countries choose their own set of dimensions, indicators, weights, and cut-offs, according to their plans and contexts.
• The report presents an in-depth analysis of the headcount ratio and intensity of multidimensional poverty at the national, State/UT, and district levels.
• The first report was based on the reference period of 2015-16 of the National Family Health Survey (NFHS)- 4.
• MPI Parameters & Methodology:
• The Index is based on the Alkire-Foster methodology developed by its technical partners — the Oxford Poverty and Human Development Initiative (OPHI) and United Nations Development Programme (UNDP) and has three equally weighted dimensions –
• Health,
• Education, and
• Standard of Living.
• These three dimensions are represented by 12 indicators–
• 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.

National Multidimensional Poverty Index 2023:

• Recently, the NITI Aayog published the ‘National Multidimensional Poverty Index: A progress of Review 2023’.
• The report is based on the latest National Family Health Survey (2019-21) and represents progress made by India in reducing multidimensional poverty between the two surveys, NFHS-4 (2015-16) and NFHS-5 (2019-21).

Key Results – Steep Decline in Poverty

• India has achieved a remarkable reduction in its MPI value and Headcount Ratio between 2015-16 and 2019-21.
• About 135.5 million (13.5 crore) persons have exited poverty between 2015-16 and 2019-21.
• Rural areas saw a faster reduction in their MPI value, compared to urban areas.
• The incidence of poverty fell from 32.59% to 19.28% in rural areas compared to a decline from 8.65% to 5.27% in urban areas between 2015-16 and 2019-21.
• Nearly 3.43 crore people escaped poverty in Uttar Pradesh, registering the largest decline among the 36 States and Union Territories.
• NITI Aayog said the government’s dedicated focus on improving access to sanitation, nutrition cooking fuel, financial inclusion, drinking water, and electricity has led to significant advancements in these areas.
• It further said improvements in nutrition, years of schooling, sanitation, and cooking fuel played a significant role in bringing down poverty.