Context: Recently, Government think-tank NITI Aayog has released the Multidimensional Poverty Index (MPI).

• Earlier, Global Multidimensional Poverty Index 2021 was released by the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative (OPHI).

Multidimensional Poverty Index (MPI)

• This baseline report of India’s first-ever national MPI measure is based on the reference period of 2015-16 of the National Family Health Survey (NFHS)- 4.
• It uses the globally accepted and robust methodology developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP).
• It captures multiple and simultaneous deprivations faced by households.

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, apart from that all three dimensions are given equal weightage in the index. 

Why NFHS-4?

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

How is the data used?

• The national MPI 2021 is calculated using the household microdata collected at the unit-level for the NFHS-4 that is used to derive the baseline multidimensional poverty.
• Further, the country’s progress would be measured using this baseline in the NFHS-5, for which the data was collected between 2019 and 2020.
• The progress of the country with respect to this baseline will be measured using the NFHS-5 data collected in 2019-20.

Key highlights NMPI

• 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%).

Significance of the Index

• Contribution towards Instituting Public Policy Tool: The development of the Index is an important contribution towards instituting a public policy tool which monitors multidimensional poverty, informs evidence-based and focused interventions, thereby ensuring that no one is left behind.
• Presents Overall Picture of Poverty: This presents an overall picture of poverty in the country, while also enabling closer and more in-depth analyses of areas of interest such as regions – state or districts, and specific sectors and complements the existing monetary poverty statistics.
• Help Achieving SDGs Goals: It is a contribution towards measuring progress towards target 1.2 of the Sustainable Development Goals (SDGs) which aims at reducing “at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions.