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NITI Aayog has recently released the state-wise National Multidimensional Poverty Index or MPI in line with the global index released by the United Nations each year.

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National MPI Project

• The National MPI Project is the first attempt in years to define poverty measures and is aimed at deconstructing the Global MPI and creating a globally aligned and yet customised India MPI.
• The MPI is based on three dimensions — health, education, and standard of living — with each having a weighting of one-third in the index.
• The household micro data collected at the unit-level for the NFHS serves as the basis of the computation of National MPI.

Parameters used

• The NMPI is calculated using 12 indicators — nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account,
• They have been grouped under three dimensions namely, health, education and standard of living.

Why NFHS-4?

• Connoting regime change: Data collected during the NFHS-4 (2015-2016) corresponds to the period before the full roll out of new governments’ flagship schemes.
• Baseline after rollout of new schemes: Hence it serves as a useful source for measuring the situation at baseline i.e. before large-scale rollout of nationally important schemes.

Key highlights NMPI

The MPI identifies 25.01 percent of the population as multidimensionality poor.

• 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 lowest population poverty levels (0.71%), followed by Puducherry (1.72%), Lakshadweep (1.82%), Goa (3.76%) and Sikkim (3.82%).
• Other States and UTs where less than 10% of the population are 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%).

Need for National MPI

Poverty is not just the absence of income, money and/or money-like resources required to meet needs. 

• Multiple disadvantages: A person who is poor can suffer multiple disadvantages at the same time – for example they may simultaneously have:

1. Poor health or malnutrition
2. Lack of clean water or electricity
3. Poor quality of livelihood options
4. Little/No schooling
5. Disempowerment
6. Threats of violence
7. Climate change vulnerability etc.

Other factors include:

1. Limited financial resources
2. Material deprivation
3. Social isolation
4. Exclusion and powerlessness
5. Physical and psychological ill-being

• Multiple dimensions: Focusing on one factor alone, such as income, is not enough to capture the true reality of poverty. National MPI ensures a holistic approach towards defining poverty at the national level.
• More comprehensive: MP measures can be used to create a more comprehensive picture. They reveal who is poor and how they are poor – the range of different disadvantages they experience.
• Better targeting: As well as providing a headline measure of poverty, multidimensional measures can be broken down to reveal the poverty level in different areas of a country and among different sub-groups of people.
• Priority definition for target groups: It offers statistics that determine the national priorities by using a set of dimensions, indicators with respect to the urban and rural areas of India along with an indicator-wise deconstruction and breakdown.

Various govt. interventions to for poverty alleviation

(I) Food Security

• National Food Security Act 2013 (also ‘Right to Food Act’): It aims to provide subsidized food grains to approximately two thirds of the country’s 1.2 billion people.  

(II) Employment and Skilling

• National Rural Livelihood Mission (NRLM) – Ministry of Rural Development started NRLM 2011 to evolve out the need to diversify the needs of the rural poor and provide them jobs with regular income on a monthly basis.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) – In 2005 Ministry of Rural Development initiated MGNEREGA to provide 100 days of assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women.

(III) Income Support

• PM Jan Dhan Yojana (PMJDY): The Ministry of Finance in 2014 initiated PMJDY that aimed at direct benefit transfer of subsidy, pension, insurance, etc., and attained the target of opening 1.5 crore bank accounts. The scheme particularly targets the unbanked poor.
• PM Kisan Samman Nidhi (PM KISAN): PM KISAN is an initiative by the government of India in which all farmers will get up to ₹6,000 per year as minimum income support.

Various challenges

• Pauperization: Every year a huge number is added to the population pool of the country. To exemplify, this pandemic has led to severe pauperization of migrant workers.
• Regional divide: Incidence of extreme poverty continues to be much higher in rural areas than in urban areas.
• Jobless growth: Despite rapid growth and development, an unacceptably high proportion of our population continues to suffer from severe and multidimensional deprivation.
• Inadequate resources: The resources allocated to anti-poverty programmes are inadequate and there is a tacit understanding that targets will be curtailed according to fund availability.
• Implementation bottlenecks: Lack of proper implementation and right targeting has been legacy issues in India. There has been a lot of overlapping of schemes.

Conclusion

• The National MPI offers a clear picture of various developmental projects and their impact in creating a better roadmap to gauge poverty at different levels.
• Active participation by the states in the creation of alignment with the development agendas is must.
• To do so, indices like NMPI act as a directive in shaping up policy and will better their implementation.