The Oxford Poverty and Human Development Initiative publishes the Global Multidimensional Poverty Index (MPI). The goal of this index is to use a variety of variables to evaluate acute multidimensional poverty in emerging countries. It was created in 2010 by OPHI in collaboration with the United Nations Development Programme (UNDP). It is published annually as part of the UNDP's Human Development Report (HDR). In September 2021, MPI 2021 was issued. India was placed 62 out of 107 nations in the Global MPI 2020. In this article, we will study about Multidimensional Poverty Index, which is important for UPSC Examination.

What is Multidimensional Poverty Index?

• The global Multidimensional Poverty Index (global MPI) is a poverty indicator that takes into account the numerous disadvantages that impoverished people endure in terms of education, health, and living conditions.
• The Global MPI measures both the occurrence (the percentage of people in a population that are multidimensionally poor) and degree of multidimensional poverty (the average number of deprivations that each poor person experiences).
• It enables for comparisons between countries, regions, and the world, as well as within countries by ethnic group, urban/rural location, and other features of households and communities.

Dimensions and Indicators of Global MPI

The performance of countries is measured using three dimensions and ten indicators. The following are listed below:

Multidimensional Poverty Index and SDGs

The measurement of acute multidimensional poverty also keeps track of countries' progress toward the Sustainable Development Goals (SDGs) targets:

How is Deprivation measured using MPI’s indicators?

According to OCHI, the following factors contribute to the deprivation of living in a household:

1. A person between the ages of 0 and 70 who is malnourished.
2. In the five years leading up to the MPI survey, a child aged 0 to 18 died.
3. No eligible household has finished the six years of schooling.
4. The school-aged youngster does not attend school until the age of eight, when he or she should be in class eight.
5. Solid fuel, such as cow dung, is used as a cooking fuel in the home.
6. The presence of an inadequate or non-existent sanitation facility. Improved sanitary facilities shared with other houses result in living deprivation as well.
7. The lack of access to safe drinking water. Also, if the safe drinking water is only accessible after a 30-minute round-trip walk from home.
8. Households are without electricity.
9. Housing materials are insufficient in any of the three components: floor, roof, or walls.
10. When a family does not own a car or a truck but only has one of the following:

• Radio
• TV
• Telephone
• Computer
• Animal cart
• Bicycle
• Motorbike
• Refrigerator

The following points about Global MPI should be noted:

• It analyses poverty on a person-by-person basis.
• When a person is deficient in one-third of the 10 indications, he or she is labelled as "MPI Poor."
• The percentage of deprivations experienced by an individual is used to determine the depth of their poverty.

Global Multidimensional Poverty Index 2021 – Key Findings

According to the Global MPI 2021,

• 1.3 billion people live in acute multidimensional poverty in 109 countries.
• 644 million of the 1.3 billion people are children (under the age of 18), while 105 million are adults (above the age of 60).
• In Saharan Africa or South Asia, over 85% of multidimensionally poor people dwell.
• Rural areas are home to 84 percent of the impoverished.
• Middle-income countries are home to 67 percent or more of the world's multidimensionally poor population.
• A total of 481 million people live with an out-of-school child.
• 550 million people do not have a car and lack at least seven of the eight assets (radio, television, telephone, computer, animal cart, bicycle, motorcycle, or refrigerator).
• Within a 30-minute roundtrip walk, 568 million people do not have access to improved drinking water.
• 635 million people live in families where no one has finished at least six years of education.
• 678 million people do not have access to electricity.
• 788 million people live in a family where at least one person is malnourished.
• Solid cooking fuels, poor sanitation, and unsuitable housing affect each of the billions.

Global MPI – India and Its Neighbours

The National Family Health Survey in India is used by the MPI to collect data (NFHS). India placed 62nd in MPI 2020 with a score of 0.123. India has a headcount ratio of 27.91 per cent in the Global MPI 2020.

India's Neighbors were ranked by the MPI in 2020 as follows:

• Sri Lanka – 25
• Nepal – 65
• Bangladesh – 58
• China – 30
• Myanmar – 69
• Pakistan – 73

The Multidimensional Poverty Index Coordination Committee (MPICC) in India is the MPI's key agency.

National Multidimensional Poverty Index: NITI Ayog

On November 20, 2021, the government think tank Niti Aayog announced the first-ever Multi-dimensional Poverty Index (MPI), which measures poverty at the national, state/UT, and district levels. According to the first index, Bihar is the state with the highest level of multidimensional poverty

Overview of National Multidimensional Poverty Index

• The MPI aims to quantify poverty in all of its forms, complementing existing poverty statistics based on per capita consumption spending.
• India is ranked 66th out of 109 countries in the Global MPI 2021. The National MPI aims to deconstruct the Global MPI and create a globally aligned but customised India MPI for developing comprehensive Reform Action Plans, with the overall goal of improving India's place in the Global MPI rankings.
• Health, education, and standard of living are the three equally weighted dimensions.
  • Nutrition, school attendance, years of schooling, drinking water, sanitation, housing, and bank accounts are only a few of the metrics that illustrate these three dimensions.

Methodology & Data

• The national MPI is based on the internationally recognised and reliable methodology created by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP).
• This baseline report for the national MPI measure is based on the National Family Health Survey's reference period of 2015-16. (NFHS-4).
  • The NFHS-4 data was used to create a baseline multidimensional poverty estimate in order to understand the reality on the ground prior to the full implementation of several central government programmes.
  • NFHS-4 comes before the full implementation of the (central government's) flagship housing, drinking water, sanitation, power, cooking fuel, financial inclusion, and other key measures to improve school attendance, nutrition, mother and child health, and other major endeavours.
  • However, it should be emphasised that the NFHS-5 data indicates that access to clean cooking fuel, sanitation, and electricity has improved, resulting in a reduction in impoverishment.

Finding of the Index

• Levels of Poverty:
  • Bihar has the biggest proportion of multidimensionally poor persons in the state, followed by Jharkhand and Uttar Pradesh.
  • Kerala has the lowest population poverty rate, with Puducherry, Lakshadweep, Goa, and Sikkim following closely after.
• People that are malnourished:
  • Jharkhand, Madhya Pradesh, Uttar Pradesh, and Chhattisgarh have the largest number of malnourished people, followed by Bihar, Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.

Significance of the Index

• Contribution towards Instituting Public policy Tool:
  • The Index's creation is an important step toward establishing a public policy tool that monitors multidimensional poverty and informs evidence-based and targeted interventions, ensuring that no one is left behind.
• Provides an Overview of Poverty:
  • This provides an overall picture of poverty in the country while also allowing for more detailed and in-depth analyses of areas of interest such as regions – state or districts – and specific sectors, and it supplements existing monetary poverty statistics.
• Contribute to the achievement of the SDGs:
  • It contributes to measuring progress toward Sustainable Development Goal (SDG) target 1.2, which aims to reduce "at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions."

Conclusion

The Multidimensional Poverty Index aims to measure poverty in all of its dimensions, effectively supplementing existing poverty statistics based on per capita consumption expenditure. India is ranked 66th out of 109 countries in the Global MPI 2021. The government think tank Niti Aayog announced the first-ever Multi-dimensional Poverty Index (MPI) on November 20, 2021, which measures poverty at the national, state/UT, and district levels.

GS Mains Questions and Model Answers

Q1: Explain the concept of the Multidimensional Poverty Index (MPI) and its significance in assessing poverty. How does it differ from traditional income-based poverty measures?

Answer: The Multidimensional Poverty Index (MPI) is a comprehensive measure of poverty that captures the various deprivations individuals face in health, education, and living standards. It goes beyond income as a sole determinant of poverty, considering factors such as nutrition, access to education, clean water, and adequate housing. The MPI is significant because it provides a nuanced understanding of poverty, allowing policymakers to address specific dimensions that contribute to poverty. Unlike traditional poverty measures that rely solely on income thresholds, the MPI identifies multiple facets of poverty, helping governments create targeted and efficient interventions.

Q2: Critically analyze the role of the MPI in global poverty reduction. How can it be used effectively by policymakers?

Answer: The MPI plays a crucial role in global poverty reduction by offering insights into the multidimensional nature of poverty. Policymakers can use MPI data to identify which areas—such as education, health, or basic services—require more attention and resources. For instance, if a region shows high deprivation in access to clean water, programs can be designed to improve water infrastructure. However, the MPI also has limitations, such as data collection challenges and the exclusion of income as a direct measure. For the MPI to be effective, governments must ensure robust data collection and integrate MPI insights into national development strategies.

Q3: Discuss how India has used the Multidimensional Poverty Index to guide its poverty alleviation policies. What challenges remain in addressing multidimensional poverty?

Answer: India has incorporated MPI data to inform its poverty alleviation programs, particularly in targeting rural and marginalized populations. Schemes like Swachh Bharat Mission (cleanliness) and Pradhan Mantri Awas Yojana (housing) are aligned with MPI indicators such as sanitation and housing quality. Despite progress, challenges remain in addressing multidimensional poverty, including regional disparities, urban poverty, and ensuring access to quality education and healthcare. The lack of real-time data and complexities in measuring deprivations also hinder effective policy implementation.

Previous Year Questions on  Multidimensional Poverty Index

1. UPSC CSE 2021

Question: Discuss the importance of the Multidimensional Poverty Index (MPI) in identifying and alleviating poverty in India. 

Answer: The Multidimensional Poverty Index (MPI) is essential in identifying poverty in India because it offers a holistic view, covering health, education, and living standards. Unlike traditional poverty measures that focus only on income, MPI highlights specific deprivations that households face. This helps the government design targeted interventions. For example, high deprivation in sanitation may lead to the launch of hygiene-focused initiatives. The MPI enables better allocation of resources to areas like rural regions where poverty is more severe. However, challenges persist, such as ensuring accurate data collection and overcoming regional disparities in poverty levels.

2. UPSC CSE 2019

Question: Explain how the Multidimensional Poverty Index (MPI) complements income-based poverty measures in understanding poverty. 

Answer: The MPI complements income-based poverty measures by providing a broader perspective on poverty. While income measures only financial resources, the MPI captures other dimensions such as education, health, and living standards. This allows for a more accurate identification of the root causes of poverty. For instance, a household might be financially stable but still deprived in education or healthcare, leading to a cycle of poverty. The MPI helps in formulating policies that address these multiple deprivations. By using both measures together, governments can better understand and reduce poverty through comprehensive policy frameworks.