Getting Better

POVERTY IN INDIA is a never-ending debate even if the number of poor continues to decline steadily. While the debate rages aimlessly, NITI Aayog recently issued the 2023 edition of the National Multidimensional Poverty Index (MPI). The MPI shows significant progress in eliminating poverty in all its forms in India. The findings of NITI Aayog tally with those of the UN Development Programme (UNDP) that runs its own, global, version of MPI.

The results show that India has indeed made a significant dent in poverty between 2015-16 and 2019-21. Between those years, 135 million people exited mul­tidimensional poverty. The proportion of the country’s population living in multidimensional poverty decreased from 24.85 per cent in 2015-16 to 14.96 per cent in 2019-21. During this period, MPI nearly halved from 0.117 to 0.066, indicating a sustained improve­ment across a swathe of areas, such as education, healthcare and standard of living. The data used for the exercise came from the fourth (2015-16) and fifth (2019-21) rounds of the National Family Health Survey (NFHS-4 and 5).

A broadly similar story emerges from the Global MPI (GMPI) measured by the Oxford Poverty & Human Development Ini­tiative and UNDP. In that edition of MPI released in July as well, India’s population living in multidimen­sional poverty decreased by a huge 415 mil­lion individuals between 2005-06 and 2019- 21. For the period corresponding to NITI Aayog’s MPI measurement, the GMPI, too, counted a nearly identical number of Indians getting out of multidimensional poverty. During these years (2015-16 to 2019-21), GMPI for India decreased from 0.122 to 0.069. Over the longer term (from 2005-06 to 2019-21), this decrease was even more pronounced: from 0.283 to 0.069.

What is more interesting is the geographic spread and effects of this reduction. In northern India—perennially compared with the southern states as an economic laggard—the reduction in mul­tidimensional poverty has been nothing less than astounding. Uttar Pradesh (UP), Bihar, Madhya Pradesh (MP), Rajasthan and Odisha have seen sharp declines in people living in poverty. Of these, the so-called ‘Bimaru’ states have seen a massive reduction in the number of poor. Out of the 135 million people who ceased to be poor, nearly 25 per cent were from UP alone, with the state witness­ing a reduction of 14.75 percentage points in its headcount ratio between 2015-16 and 2019-21. In absolute terms, UP represents the single-biggest reduction in multidimensional poverty during this period. Bihar witnessed an even bigger reduction in its headcount ratio during this period: 18.13 percentage points.

Within UP, the results are impressive when seen from the van­tage of district-level changes. Some of the most stubborn levels of poverty in the state were to be found in the cluster of three districts in the state’s northeastern part adjoining Nepal. These three dis­tricts—Shravasti, Bahraich and Balrampur—had very high values for the MPI index score when the last such measurement (based on NFHS-4 in 2015-16) was carried out. Shravasti had an eye-watering level of poverty and its MPI index score stood at 0.412. By 2019-21 this had fallen to 0.249 and the district witnessed a reduction in poverty headcount of 24.72 percentage points, among the highest in the state. Similarly, Balrampur had a high MPI of 0.373 in 2015-16 that came down to 0.209 by 2019-21, along with a poverty head­count reduction of nearly 28 percentage points. Even the district with entrenched poverty, Bahraich, has seen its MPI climb down from 0.391 to 0.285. Its headcount has gone down with a relatively modest 17.41 percentage points.

These are not the only districts with high levels of poverty that have seen a dramatic improvement over these years. The list of such districts is considerably longer and districts like Maharajganj and Gonda have seen elimination of multidimensional poverty by nearly 30 percentage points each. These are districts that had poor connectivity and little by way of infrastructure and economic activity. At one point districts like Gonda and the neighbouring district of Basti simply ‘exported’ labourers and workers to states like Punjab and Haryana for agricultural work. That is changing, for the better, now. Bahraich still has some distance to go but it, too, has seen significant reduction in poverty in this cluster of districts.

The other significant geographic effect is clearly visible in pov­erty reduction efforts in Left-Wing Extremism (LWE)-affected dis­tricts. In this case, there is an interesting mix of geographical and political challenges. In some very difficult and remote regions where Maoism has taken root, it has been difficult to improve MPI scores. While in others, these challenges notwithstanding, governments have been able to make a significant dent in the prevalence of poverty.

One interesting case is that of Bijapur, a district at the southern­most tip of Chhattisgarh that continues to be majorly affected by LWE activity. Bijapur’s topography is such that most parts of the district are remote from the district headquarters despite frenetic road construction in recent years. Then, when the monsoon ar­rives, large parts of the district are marooned. The result is that it is one of the few districts where multidimensional poverty has gone up from 2015-16 to 2019-21. Bijapur’s MPI score was 0.183 in 2015-16 but increased to 0.262 in 2019-21. This was visible in its poverty headcount ratio that went up from 44.2 per cent to 49.72 per cent—an increase of 5.5 percentage points—even as its inten­sity of poverty has gone up. Intensity of poverty seeks to answer the question “How poor are the poor?” In Bijapur, this went up from 44.52 per cent to 52.79 per cent over these years.

In contrast, in other LWE-affected districts in Chhattisgarh (for example, Dantewada and Kondagaon) and other states, such as Jharkhand, there has been marked improvement in poverty reduc­tion. In Jharkhand’s western belt of districts—Garhwa, Latehar, Gumla and Simdega—MPI scores have improved quite a bit from 2015-16 to 2019-21 even if these districts pose similar challenges of security and connectivity.

TRADITIONAL METHODS OF estimating poverty are largely reliant on estimating consumption of individual households even as they pay lip service to education, healthcare and other measures of deprivation. This is a relic of one way of looking at poverty that was based on poverty lines which were based on either the number of calories consumed by an individual or its—very rough—conversion to a monetary equivalent. This has changed over time and now other items of expenditure are considered as well, but the fetish with consumption continues. There is an aca­demic issue here as well: ‘poverty experts’ are extremely conserva­tive in changing questionnaires, frames and other devices used to ascertain basic data as they like continuity in methods. This, even if surveys have limitations in terms of accuracy or representativeness.

This may be of academic interest as there is an entire ‘poverty industry’ that spans academia and civil society. But its relevance, beyond indicating poverty trends, is limited. An unfortunate devel­opment in this context is the politicisation of these calculations: a certain section wants to emphasise that poverty reduction in India has either stalled or poverty has gone up. A number of indicators are usually put forward to make this point, ranging from rural wag­es, migration patterns between rural and urban areas and others.

In contrast, the government probably has a better idea of what is required to make a difference to the lives of the poor. For example, the usual ‘poverty experts’ continue to hammer the point that mea­sures such as MGNREGA ought to be extended and intensified. That minimum wages have an annual upward revision and that, in general, redistributive measures be accelerated. But does that make a difference to the lives of the poor beyond a point?

Instead, the Narendra Modi government has emphasised mea­sures like providing cooking fuel like LPG, sanitation (for example, under the Swachh Bharat Mission), low-cost housing, drinking water (under Jal Jeevan Mission) and electricity, especially rural electrification. It is here that the Indian version of MPI enters.

Unlike the usual consumption-based estimates of poverty, MPI looks at various dimensions of deprivation, such as healthcare, edu­cation and standard of living. Nutrition is only one sub-part of this process of evaluating deprivation. Under the three broad heads— health, education and standard of living, each having one-third weight in the overall multidimensional poverty index—each in­dividual’s deprivation score is calculated by evaluating parameters under each head and then the results are aggregated across all indi­viduals. The process of computing the index is technical and there are other procedures involved as well. Finally, MPI is computed as a compound of poverty headcount and the intensity of poverty.

The results are interesting. In 2015-16, roughly 58.5 per cent of households did not have access to cooking fuel. This percentage had come down to 43.9 per cent by 2019-21, a reduction of 14.6 per­centage points. In the case of sanitation, 52 per cent of the popula­tion lacked access to toilets, a figure that came down to 30 per cent by 2019-21. In this context, it is interesting to note that only around 14 per cent of the population lacked assets in 2015-16, contrary to claims of widespread destitution or near-destitution level poverty in the country. This figure stood at 10.16 per cent in 2019-21.

Between 2015-16 and 2019-21, 135 million people exited multidimensional poverty. The proportion of the population living in multidimensional poverty decreased from 24.85 per cent in 2015-16 to 14.96 per cent in 2019-21

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The picture of deprivation and its reduction across India is varied and not uniform across different indicators. Consider the category of assets. Ordinarily, one could expect that large northern Indian states like UP and MP would be high up in the rankings of asset-deprived states. But it is Meghalaya, followed by Nagaland, at the top of this deprivation indicator. Back in 2015-16, 30 per cent of Meghalaya’s population lacked assets, a figure that had increased to 37 per cent by 2019-21. In Nagaland, this figure was nearly 34 per cent in 2015-16 but came down to 29.5 per cent by 2019-21. The only major state from the north that ranks high by this metric is Bihar: 20.25 per cent of the state’s population lacked assets in 2019-21, a figure that has come down from 24.32 per cent in 2015-16. UP, in fact, ranks quite low in this league with just around 8 per cent of the state’s population lacking assets in 2019-21 as compared with 12.44 per cent in 2015-16.

These variations can, in part, be a matter of geography and local conditions as well. In the case of housing, for example, northeast­ern states like Manipur, Arunachal Pradesh, Assam, Tripura and Nagaland are at the top of the chart. On many indicators, Bihar ranks quite high, marking it as one of the poor performers in the otherwise fast-catching-up states of north India.

Many of these changes for the positive are the result of a changed emphasis on provision of goods, such as housing and sanitation, which have become quasi-public goods, especially for poor citizens. This approach seems to have worked. In a recent essay, Shamika Ravi, a member of the Prime Minister’s Economic Advisory Council (EAC-PM) analysed data on electricity, potable water, sanitation, bank accounts and LPG. She wrote: “Based on a nationally representative sample of more than 1.2 million house­holds across 2015-16 and 2019-21, we do not find any evidence that the government catered only to one community (Hindu majority) or against any minority groups in the country.”

She added: “We also do not find any discrimination between geographies and religious clusters in provision of basic amenities such as electricity, toilets, water, bank accounts, mobile phones and LPG. These results show that the roots of Indian democracy run deep and its health is reaffirmed in its day to day functioning and practice.” The time periods that Ravi commented on were identical with those used in the 2023 edition of MPI released by NITI Aayog.

There is little doubt that India continues to battle deeply en­trenched poverty in certain regions. This is not just an economic phenomenon and has obvious social manifestations as well. But the good news is that a significant dent has been made and the country is on the right track.

About The Author

Siddharth Singh

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