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Global Multidimensional Poverty Index (MPI)

Posted on October 18, 2022 by admin1  175

In News

  • Recently, the Global Multidimensional Poverty Index (MPI) was released.

Report highlights

  • Report highlights:
    • For India:
      • Improvements:
        • As many as 41.5 crore people exited poverty in India during the 15-year period between 2005-06 and 2019-21.
          • Out of these, two-thirds exited in the first 10 years, and one-third in the next five years, according to the report.
        • It shows that the incidence of poverty fell from 55.1% in 2005/06 to 16.4% in 2019/21 in the country.
        • Deprivations in all 10 MPI indicators saw significant reductions as a result of which the MPI value and incidence of poverty more than halved.
      • Global significance of poverty reducion in India:
        • Improvement in MPI for India has significantly contributed to the decline in poverty in South Asia.
        • It is for the first time that it is not the region with the highest number of poor people, at 38.5 crore, compared with 57.9 crore in Sub-Saharan Africa.
      • State-wise data:
        • Bihar, the poorest State in 2015/2016, saw the fastest reduction in MPI value in absolute terms. 
        • 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.
      • Challenges:
        • The report notes that the ongoing task of ending poverty remains daunting. 
        • India has by far the largest number of poor people worldwide at 22.8 crore, followed by Nigeria at 9.6 crore. 
          • Two-thirds of these people live in a household in which at least one person is deprived in nutrition. 
        • There were also 9.7 crore poor children in India in 2019/2021- more than the total number of poor people, children and adults combined, in any other country covered by the global MPI.
    • Globally:
      • Globally, of the total 610 crore people across 111 developing countries, 19.1% or 120 crore live in multidimensional poverty. Nearly half of them live in severe poverty.
  • Report Shortcomings:
    • The report doesn’t fully assess the effects of the COVID-19 pandemic on poverty in India as 71% of the data from the National Family Health Survey-5 (2019-2021) relied upon for MPI were collected before the pandemic.

About Global Multidimensional Poverty Index (MPI)

  • About:
    • The report is produced by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI). 
    • The global Multidimensional Poverty Index (MPI) is an international measure of acute multidimensional poverty covering over 100 developing countries. 
  • Report indicators:
    • The global MPI constructs a deprivation profile of each household and person through 10 indicators spanning health, education and standard of living. 
    • All indicators are equally weighted within each dimension. 
    • The most common profile, affecting 3.9 percent of poor people, includes deprivations in four indicators: nutrition, cooking fuel, sanitation, and housing.

  • Calculating multidimensionally poor:
    • The global MPI identifies people as multidimensionally poor if their deprivation score is 1/3 or higher.
    • The MPI is calculated by multiplying the incidence of poverty and the average intensity of poverty. 
    • The MPI ranges from 0 to 1, and higher values imply higher poverty. 
    • By identifying who is poor, the nature of their poverty (their deprivation profile) and how poor they are (deprivation score), the global MPI complements the international $1.90 a day poverty rate, which was revised by the World Bank last month to $2.15 per day.
  • SDG target:
    • The Sustainable Development Goal target 1.2 is for countries to reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions by 2030. 

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’s “Global Indices for Reforms and Growth (GIRG) initiative”

  • Under the Global Indices for Reforms and Growth (GIRG) initiative, the country’s performance is being monitored across 29 global indices including Human Development Index (HDI), Global Hunger Index (GHI), Global Competitiveness Index (GCI), Human Capital Index (HCI), Global Innovation Index (GII), among others. Multidimensional Poverty Index (MPI) is one of them.
  • Aim:
    • This exercise is aimed at leveraging the monitoring mechanism of important social, economic, and other internationally recognised indices, enabling the utilisation of these indices as tools for bringing about reforms to improve outcomes and correspondingly reflect them in India’s performance in these indices globally.
  • About the National Multidimensional Poverty Index:
    • The National MPI Project is aimed at deconstructing the Global MPI and creating a globally aligned and yet customised India MPI for drawing up comprehensive Reform Action Plans with the larger goal of improving India’s position in the Global MPI rankings.
    • NITI Aayog is the nodal Ministry for the Multidimensional Poverty Index (MPI). 

Way Ahead

  • 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.

Source: TH

 
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