India needs multiple measures to get proper clarity on poverty
The Niti Aayog this month released a report on multi-dimensional poverty for 2020-21. Its 2021 MPI report had used National Family Health Survey (NFHS)-4 data for 2015-16. The new report has taken now-available NFHS-5 data for 2020-21 and drawn comparisons between 2015-16 and 2020-21.
The proportion of India’s population deemed poor by the multi-dimensional poverty index (MPI) fell from 24.85% to 14.96% over this period. India is relatively new in using MPI to report poverty, but the United Nations Development Programme (UNDP) has been releasing its Global MPI report since 2010, the latest of which, released earlier this year, showed MPI estimates for India as slightly different from those in the Niti Aayog and NHFS reports. As against 14.96% MPI poor reported by the Niti Aayog report, the UNDP estimate is 16.4%.
The variance is due to differences in the variables used and changes in the definitions of some. Taking a longer view, India moved 415 million persons out of MPI poverty between 2005-06 and 2020-21, with 135 million moving out after 2015-16, compared to 270 million between 2005-06 and 2015-16. In percentage terms, India had 55.1% MPI poor in 2005-6, 27.7% in 2015-16 and 16.4% in 2020-21 (UNDP data), with the rate of decline slowing from 2.7% per annum between 2005-06 and 2015-16 to 2.4% between 2015-16 and 2020-21.
While the MPI poverty estimates suggest MPI poverty continues to fall, this appears to be at variance with poverty as measured using money-metrics such as income and consumption. Historically, poverty in India has been measured on consumption expenditure. Unfortunately, there is no data on consumption expenditure after 2011-12.
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