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MPI poverty

Poverty ratios below a poverty line don't capture everything about poverty.

Written by Bibek Debroy
New Delhi | August 4, 2010 3:55:02 pm

Poverty ratios below a poverty line don’t capture everything about poverty. The multi-dimensional poverty index (MPI) will be incorporated into this year’s HDR. Comparing apples with apples,55% of India’s population is poor under MPI (2005 data),42% below $1.25 a day,76% below $2 a day and 29% below the national poverty line.

MPI is based on ten indicators – education (schooling,enrolment),health (child mortality,nutrition) and living standards (electricity,sanitation,drinking water,floor,cooking fuel,assets). At an all-India level,deprivation across these are 17.6% for schooling,25% for enrolment,23% for child mortality,38.9% for nutrition,28.7% for electricity,49.3% for sanitation,12% for drinking water,40% for floor,52.2% for cooking fuel and 38.1% for assets.

There is also a break-up of MPI poverty across castes,but only for Hindus. Within this segment,33.3% of general Hindus are MPI-poor. But the figure is 65.8% for SCs,81.4% for STs and 58.3% for OBCs. MPI poverty is between 40% and 50% in Uttarakhand,Haryana,Maharashtra,J&K,Andhra and Karnataka,between 50% and 60% in the North-East and West Bengal,between 60% and 70% in Orissa,Rajasthan,UP and MP,and more than 70% in Chhattisgarh,Jharkhand and Bihar.

First,there has been income growth since 2005 and since 2003,growth rates have picked up,before the recent slowdown. This has trickled through,though not evenly,across geographical regions,gender and caste. In all probability,once the large-sample NSS figures surface next year,the standard poverty line figures will show a significant drop from 29% (below the national poverty line) to around 20%.

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Second,it is a good idea to have a better understanding of poverty,such as through MPI. But will it lead to a better targeting of anti-poverty programmes,which is the intention? Or will it only reinforce stereotypes in two ways? First,by providing ammunition to the idea that 50% of India must be poor,and second,by reinforcing the collective identification of poverty with caste? For instance,the results of the NCAER study,now compiled as a book (‘Caste in a Different Mould’) show that if we use caste as a determinant,without controlling other variables,we may end up with the wrong conclusions and wrong policies.

The MPI results are in the public domain and have also been reported in the media. But once HDR is published,reactions will be interesting,especially if the comparison between MP and Congo is retained in HDR.

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First published on: 04-08-2010 at 03:55:02 pm
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