The alacrity with which Surjit Bhalla and Karana Bhasin (B&B) have decided to conclude the poverty debate (‘Poverty is down, period’, IE, November 4) by shifting from their earlier computations — based on a simulated distribution of consumption expenditure for recent years to physical deprivation indicators from NFHS — needs to be appreciated. The urgency was there, possibly to address the criticism that delinking poverty from deprivations in health, education and access to basic amenities, along with calories, would minimise the importance the poverty numbers enjoy in policy debates, if not in policy making. This is not to overlook the mistake committed by the authors in their paper, wherein they use data from IHDS 2011-12 along with that from NFHS which have issues of comparability.
The readers following the poverty debate in media are indebted to the piece (“Poverty uncensored”, IE, November 24) by Jean Dreze, which besides bringing out the anomaly of “copy-pasting outdated multidimensional poverty figures of 2005-06 as the data of 2011-12” in the analysis of B&B, highlights a few methodological issues, related to computation of multidimensional poverty index (MPI). It shows how aggregating the improvements in all the constituent indicators of MPI by giving their weights can change the trend of poverty obtained from the overall MPI. The other methodological issue Dreze raises is whether improvements by certain percentage points in any development indicator at two points of time (or a reduction in deprivation indicators) can be considered as an equal achievement, irrespective of the base value, at different points. For example, can the reduction of illiteracy percentage from 50 to 45 be considered the same as from 10 to five? Disagreeing with Dreze, many may argue that the low base makes it more difficult to bring about change than when the base is higher.
It is important to point out that both the papers simply utilise the processed figures and the results from the Global Multidimensional Poverty Index published earlier this year, making no effort to define the indicators in the Indian context, as attempted by NITI in its baseline report, using NFHS data for 2015-16. The only value added by B&B is the addition of the figures of 2011-12, which turns out to be negative, while that in Dreze is the assessment of the progress in the pre-Narendra Modi with the Modi era using uncensored poverty data for different indicators, thereby departing from MPI framework, thus taking up an issue with UNDP and not with B&B. Understandably, Dreze finds no difference between the rate of decline in poverty in the two periods while the global report and B&B conclude a higher rate of decline in the second period.
Understandably, a researcher can select a set of indicators, choose their sources and assign the weights to obtain, to an extent, a trend and pattern he/she desires. The list of the indicators and their weights developed by UNDP in collaboration Oxford Poverty and Human Development Initiative (OPHI) understandably have not been adopted universally. Most of these have selected indicators under three dimensions — health, education and living standards — having equal weights. Individual indicators have, however, been constructed differently so much so that the figures in the regional and national reports cannot be compared with those in the global report. Although some guidance is available regarding the broad framework of analysis from OPHI, the exact selection of indicators depends on the regional/national study team. A review of the MPI prepared across the world reveals that the list of indicators and their weights have varied significantly across regions and countries due to the local consultative processes and the sociopolitical priorities of the government, despite attempts being made to withstand political pressures, representing short-term interests.
NITI Aayog’s baseline report, prepared with support from OPHI, employs 12 indicators against 10 in the global report. It adds maternal health under Health and banking facility under Living Standards as additional indicators, but adjusts the weighting system to ensure that each dimension has equal weight. The Arab Multi-Dimensional Poverty Report, brought out by UNESCWA, with which the first author was associated as a research advisor, is based on the same three dimensions. This also has two additional indicators: Early pregnancy or female genital mutilation (FGM) under Heath and congestion under Living Standards. This was based on extensive consultations with the member states and other stakeholders. The exact indicators and their deprivation thresholds in this as also the NITI Aayog report are mostly different from those in the Global MPI, although their coverage broadly corresponds to each other. The robustness and acceptability of the results in any report will inevitably depend on the scientific basis of the consultative process for developing the indicators and here consensus is rare. While the inclusion of FGM as an indicator of poverty was contested by several members of the Arab League, inclusion of bank account at par with drinking water or sanitation in promoting Living Standards is unlikely to go unchallenged in India.
An important point which has not been noted explicitly by any of the authors mentioned above is that MPI is not a headcount ratio of the multidimensionally poor. It multiplies the latter by the depth of deprivation, computed by averaging the deprivation of all individuals overall indicators. The adjusted headcount is the MPI and any temporal or cross-sectional comparison must be made based on this number as per the global framework in all indicators with appropriate weights, as attempted by Dreze.
The tenor of the OPHI methodology, thus, supports the usage of censored figures, although there can be arguments to the contrary as well. The architects of the methodology could well argue that a household does not become poor in an indicator simply because of its deficit in that indicator since this deficit can be compensated by “no deficit” in a good number of other indicators so much so that the household escapes getting classified as multidimensionally poor. One can, on the other hand, argue that the deficit in certain critical indicators can not be compensated through others, thereby dismissing the need to reduce the number of deprived people through censoring. In accepting either position, one would be exposed to criticism.
The shift from income poverty to multidimensional poverty may be seen as desirable, but there is a host of issues regarding the choice of indicators, their data sources, scaling and weightages that need to be addressed through a consultative process, keeping it above the short-term politics.
Kundu is Senior Fellow at the World Resources Institute and Mohanan is former head of the National Statisitical Commission
The urgency was there, possibly to address the criticism that delinking poverty from deprivations in health, education and access to basic amenities, along with calories, would minimise the importance the poverty numbers enjoy in policy debates, if not in policy making. 
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