Multidimensional Poverty Index
- July 18, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Subject: Economy
Context:
A report “Charting pathways out of multidimensional poverty: Achieving the SDGs“ is released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI).
Findings:
- The Multidimensional poverty Index was observed in 75 countries from the East, Central and South Asia, Europe, Latin America and the Caribbean, Sub-Saharan Africa as well as the Pacific.
- The report was meant to provide a comprehensive picture of global trends in multidimensional poverty covering five billion people.
- The study has found that four countries India Armenia, Nicaragua and North Macedonia have reduced their MPI by half or more in 5.5 to 10.5 years.
- More than 270 million people in India were lifted out of poverty from 2005 to 2016-the largest by any country in that period
- According to the study, 55.1 per cent of the population in India lived under multidimensional poverty in 2005-06. In 2015-16, it came down to 27.9 per cent.
- As of 2015-16, the intensity of deprivation was 43.9 per cent, while the population under severe multidimensional poverty was 8.8 per cent.
- According to the study, 37.7 crore people in India lived under multidimensional poverty as of 2018.
Concept:
- Multidimensional poverty encompasses the various deprivations experienced by poor people in their daily lives such as poor health, lack of education, inadequate living standards, poor quality of work, the threat of violence, and living in areas that are environmentally hazardous, among others.
- Poverty can be defined as a condition in which an individual or household lacks the financial resources to afford a basic minimum standard of living.
Poverty Measurement
- Economists and policymakers estimate “absolute” poverty as the shortfall in consumption expenditure from a threshold called the “poverty line”.
- The official poverty line is the expenditure incurred to obtain the goods in a “poverty line basket” (PLB).
- Poverty can be measured in terms of the number of people living below this line (with the incidence of poverty expressed as the head count ratio).
- Six official committees have so far estimated the number of people living in poverty in India :
- The working group of 1962
- V N Dandekar and N Rath in 1971
- Y K Alagh in 1979; D T Lakdawala in 1993
- Suresh Tendulkar in 2009
- C Rangarajan in 2014
- The government did not take a call on the report of the Rangarajan Committee; therefore, poverty is measured using the Tendulkar poverty line. As per this, 21.9% of people in India live below the poverty line.
Tendulkar committee
- The committee was constituted by the Planning Commission to address the following shortcomings of the previous methods:
- Changes in the consumption patterns of the poor since that time, which were not reflected in the poverty estimates.
- There were issues with the adjustment of prices for inflation, both spatially (across regions) and temporally (across time).
- It recommended four major changes:
- A shift away from calorie consumption-based poverty estimationto Nutritional outcomes
- A uniform poverty line baskets (PLB) across rural and urban India;
- A change in the price adjustment procedure to correct spatial and temporal issues with price adjustment; and
- Incorporation of private expenditure on health and education while estimating poverty.
- It based its calculations on the consumption of the following items: cereal, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, intoxicants, fuel, clothing, footwear, education, medical (non-institutional and institutional), entertainment, personal & toilet goods, other goods, other services and durables.
- The Committee computed new poverty lines for rural and urban areas of each state.
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