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Economy
Mahesh

03/02/24 12:48 PM IST

Multidimensional poverty

In News
  • In her Interim Budget speech, Finance Minister Nirmala Sitharaman said 25 crore Indians had been pulled out of poverty over the past decade.
Multidimensional poverty Index 
  • Multidimensional poverty in India was found to decline from 29.17% in 2013-14 to 11.28% in 2022-23 with about 24.82 crore people escaping poverty during this period.
  • At the States’ level, Uttar Pradesh topped the list with 5.94 crore people escaping poverty followed by Bihar at 3.77 crore and Madhya Pradesh at 2.30 crore.
  • Traditionally, poverty is calculated based either on income levels or, if income data are not available, on expenditure levels. The so-called “poverty lines” are actually expenditure levels that are considered minimum enough for someone to be called poor.
  • Globally, the MPI uses 10 indicators covering three main areas: (i) health, (ii) education, and (iii) standard of living. These three dimensions have one-third weight each in the final index.
  • The health dimension includes nutrition and child & adolescent mortality indicators.
  • The education dimension includes years of schooling and school attendance indicators.
  • The standard of living dimension includes six household-specific indicators: housing, household assets, type of cooking fuel, access to sanitation, drinking water, and electricity.
  • The Indian MPI has two additional indicators: maternal health (under the health dimension) and bank accounts (under the standard of living dimension).
  • This has been done, according to the NITI Aayog, to align the MPI with India’s national priorities.
Calculation of MPI
  • The first calculation involves finding out the “incidence of multidimensional poverty” (denoted by the symbol H).
  • The incidence essentially refers to the proportion of multidimensionally poor in the population, and it is arrived at by dividing the number of multidimensionally poor persons by total population. More simply, it answers the question: How many are poor?
  • The second calculation involves finding out the “intensity” of poverty (it is demoted by the symbol A). This answers the question: How poor are they?
  • More technically, this refers to the average proportion of deprivation that is experienced by multidimensionally poor individuals. To compute intensity, the weighted deprivation scores of all poor people are summed and then divided by the total number of poor people.
  • Finally, the MPI is arrived at by multiplying the incidence of multidimensional poverty (H) and the intensity of poverty (A).
  • The MPI value for a given population, therefore, is the share of weighted deprivations faced by multidimensionally poor individuals divided by the total population.
Source- Indian Express

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