Poverty and Multidimensional Poverty Index (MPI) for UPSC

Poverty and Multidimensional Deprivation in India: Measurement, Drivers, and Policy Response

Poverty in India has declined markedly, yet deprivation persists in certain districts and remains vulnerable to health, climate, and economic shocks. A multidimensional lens—health, education, and living standards—shows both progress and pockets of exclusion. This article explains how poverty is measured, where and why it persists, and the combined role of jobs, human capital, and social protection in ending it.

Measuring Poverty: From Consumption to Capability

• Monetary lines: Tendulkar/Rangarajan committees used consumption-based poverty lines; debates centred on adequacy and price indices.
• Multidimensional Poverty Index (MPI): NITI Aayog uses NFHS data to track deprivations across health (nutrition, child mortality), education (years of schooling, attendance), and living standards (cooking fuel, sanitation, water, housing, electricity, assets). About 13.5 crore people moved out of multidimensional poverty between 2015-16 and 2019-21.
• Weights and cut-offs: Indicators carry equal weight within dimensions; a household is poor if weighted deprivations exceed one-third, highlighting overlapping deficits rather than a single cash threshold.
• Why it matters: Income alone can hide deficits in sanitation, learning, or nutrition that drive intergenerational poverty.

Trends and Spatial Patterns

• Overall decline: Headcount ratios have fallen across most states; many southern and western states have very low MPI headcounts.
• Concentration: Pockets of deprivation persist in parts of UP, Bihar, Jharkhand, MP, Odisha, some NE and tribal districts; urban slums face overcrowding, insecure tenure, and poor services.
• Vulnerability: Households near the cut-off can slip back due to a single shock—health emergency, crop loss, or disaster.

Drivers of Persistent Poverty

• Employment quality: Informal, low-productivity work (agriculture, construction) limits income growth; women face additional barriers (safety, care burdens, skill gaps).
• Human capital gaps: Learning deficits (ASER), high anaemia/wasting, and low secondary completion trap households in low-wage work.
• Infrastructure deficits: Inadequate WASH, housing, and electricity increase health risks and reduce productivity.
• Shock exposure: Limited insurance/savings make climate and health shocks ruinous; informal workers lack paid leave or social security.

Policy Toolkit: Income Security + Capability

• Food security: NFSA with free foodgrains (PMGKAY integrated) covers ~80 crore; ONORC enables migrant portability; FPS reforms and Aadhaar seeding reduce leakage.
• Income and work support: MGNREGA as rural safety net; PM-KISAN for small farmers; state cash/price support schemes; SHGs for savings/credit and livelihoods.
• Health protection: PM-JAY for hospitalisation, state schemes for top-ups/OPD; HWCs for primary care and NCD screening to prevent catastrophic spending.
• Housing, energy, water, sanitation: PMAY (Rural/Urban), Ujjwala (clean cooking fuel), Jal Jeevan Mission (tap water), Swachh Bharat (toilets), Saubhagya (electricity) address living-standards deprivation.
• Financial inclusion: PMJDY, DBT, and digital payments infrastructure speed transfer delivery and build transaction history for credit.
• Skilling and mobility: PMKVY/apprenticeships, migration support (rental housing, skilling near demand), and women-focused skilling to move workers into higher-productivity jobs.

Urban Poverty and Migration

• Urban lens: Housing shortages, insecure tenure, and poor WASH access worsen health outcomes; slum upgrading, rental housing (ARHC), and inclusive service delivery are essential.
• Migrants: ONORC, portable health/education records, and urban employment pilots can cushion shocks; heat/flood action plans protect informal workers.

Implementation Challenges and Next Steps

• Targeting and exclusion: Database errors can leave eligible households out; periodic surveys and social registries help update beneficiary lists.
• Quality of services: School learning, primary health capacity, and water/sanitation quality determine whether transfers translate into capability gains.
• Shock-proofing: Broaden crop/health insurance, climate-resilient infrastructure, and quick-disbursing relief for disasters.
• Jobs first: Raise farm productivity (irrigation, diversification), boost manufacturing/MSMEs, and enable women’s work through safety, childcare, and transport.
• Better data: Regular MPI updates, time-use data, and local dashboards to target lagging blocks and evaluate impact.

UPSC Pointers

• Differentiate monetary poverty lines vs MPI; remember MPI indicators, weights, and recent decline (13.5 crore exited 2015-21).
• Core schemes: NFSA/PMGKAY, MGNREGA, PM-KISAN, PM-JAY, PMJDY/DBT, PMAY, Ujjwala, Jal Jeevan, Swachh Bharat.
• Urban/migrant angle: ONORC, rental housing/ARHC, slum upgrading, urban employment pilots.
• Way forward: job-rich growth, shock-resilient protection, women’s participation, and investments in learning and nutrition.

Bottom line: India’s poverty fight now hinges on pairing job creation and human capital with robust, portable social protection so one health, climate, or price shock does not erase years of progress.