Context: Recently, the Global Multidimensional Poverty Index (MPI) 2022 was released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI).

About Global Multidimensional Poverty Index (MPI)

• Global Multidimensional Poverty Index is an international measure of acute multidimensional poverty covering across 111 developing countries.

• Global Multidimensional Poverty Index  2022 is a poverty measure that reflects the multiple deprivations that poor people face in the areas of education, health, and living standards.

Philosophy

• The basic philosophy of MPI is based on the idea that poverty is not unidimensional (not just depends on income and one individual may lack several basic needs like education, health etc.), rather it is multidimensional.

Publisher

• It is annually published by the Oxford Poverty and Human Development Initiative (OPHI) and the Human Development Report Office of the UNDP & it was first published in 2010.

Significance

• The Global Multidimensional Poverty Index MPI reflects both the incidence of multidimensional poverty (the proportion of people in a population who are multidimensionally poor) and its intensity (the average number of deprivations that each poor person experiences).

Methodology

• It measures each person’s deprivations across 10 indicators in three equally weighted dimensions: health, education and standard of living.

Scoring

• The MPI ranges from 0 to 1, and higher values imply higher poverty.

• A person is multidimensionally poor if she/he is deprived in one third or more of the weighted indicators (out of the ten indicators). Those who are deprived in one half or more of the weighted indicators are considered living in extreme multidimensional poverty.

Global Scenario

Incidence of multidimensional poverty

• Globally 1.2 billion people are living in multidimensional poverty.

• Nearly half of poor people (518 million) live in severe poverty, meaning their deprivation score is 50 percent or higher.

Distribution of poverty

Age-wise distribution

• Half of poor people are children under age 18.

• Nearly one in three children lives in poverty compared with one in seven adults.

• About 8.1 percent of poor people are age 60 or older.

Spatial distribution

• The number of poor people is highest in Sub-Saharan Africa (579 million), followed by South Asia (385 million). The two regions together are home to 83 percent of poor people.

• The number of poor people in Sub-Saharan Africa is larger than the combined number for South Asia and East Asia and the Pacific (494 million).

Urban-rural divide

• Nearly 83 percent of poor people live in rural areas, and 17 percent live in urban areas.

Other key findings

• More than 66 percent of poor people live in middle-income countries.

• One in six poor people lives in a female-headed household.

Indicator profile

• More than 45.5 million poor people are deprived in only four indicators. They are nutrition, cooking fuel, sanitation, and housing.

• Of those people, 34.4 million live in India, 2.1 million in Bangladesh and 1.9 million in Pakistan—making this a “predominantly South Asian profile”.

Poverty reduction

• Of the 81 countries with trend data, covering roughly 5 billion people, 72 experienced a statistically significant reduction in absolute terms in Global Multidimensional Poverty Index MPI value.

• Some 26 countries experienced a statistically significant reduction in deprivations in every indicator.

Key findings related to India

• In India 415 million people exited poverty between 2005/06 and 2019/21.

• It is the incidence of poverty falling from 55% to just over 16% over this period.

• It demonstrates that the Sustainable Development Goal target 1.2 of reducing at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions by 2030 is possible to achieve—and at scale.

• The largest number of poor people in the world — 228.9 million — lived in India in 2020

• India’s MPI value and incidence of poverty were both more than halved.

• The MPI value fell from 0.283 in 2005-2006 to 0.122 in 2015-2016 to 0.069 in 2019-2021.

• The incidence of poverty fell from 55.1% in 2005-2006 to 27.7% in 2015-2016 to 16.4% in 2015-2016.

• The incidence of poverty fell from 36.6 per cent in 2015-2016 to 21.2 per cent in 2019-2021 in rural areas and from 9.0 per cent to 5.5 per cent in urban areas.

• India still has the highest number of poor children in the world.

• More than one in five children in India are poor (21.8 per cent, or 97 million) compared with around one in seven adults (13.9 per cent).

• The most common profile, affecting 3.9% of poor people, includes deprivations in four indicators: nutrition, cooking fuel, sanitation, and housing.

• More than 45.5 million poor people are deprived in only these four indicators.

• Of those people, 34.4 million live in India, 2.1 million in Bangladesh and 1.9 million in Pakistan—making this a “predominantly South Asian profile”.

• 4.2% of the population live in severe poverty and about 18.7% people, roughly the same proportion as in 2015-2016, are vulnerable to poverty.

• Bihar, the poorest State in 2015/2016, saw the fastest reduction in MPI value in absolute terms.

• The incidence of poverty there fell from 77.4% in 2005/2006 to 52.4% in 2015/2016 to 34.7% in 2019/2021. 

• Of the 10 poorest States in 2015/2016, only one (West Bengal) was not among the 10 poorest in 2019/2021.

• The rest— Bihar, Jharkhand, Meghalaya, Madhya Pradesh, Uttar Pradesh, Assam, Odisha, Chhattisgarh and Rajasthan —remain among the 10 poorest.

• Nationally, “the relative reduction from 2015/2016 to 2019/21 was faster: 11.9% a year compared with 8.1% from 2005/2006 to 2015/2016.

Challenges for India

Levels of nutrition

• While poverty levels have not worsened, levels of under-nutrition are still very high. 

• There is no marked acceleration in rate of improvement between NFHS-3 and NFHS-4 and NFHS-4 and NFHS-5. 

• And the MPI mainly captures the pre-COVID situation because 71% of the NFHS-5 interviews were pre-COVID.

Recent World Bank estimates

• According to the World Bank’s recently released report on global poverty, India is the country with the highest number of poor people.

• Report stated that “economic upheavals brought on by Covid-19 and later the war in Ukraine” had produced “an outright reversal” in poverty reduction across the planet. 

India faces three rather acute and growing problems

• Widespread unemployment, 

• Widening inequalities and 

• Deepening poverty

None of these will be resolved by electoral victories. They require actual policy solutions. Without the right policies, India’s demographic dividend is looking more like a demographic bomb.