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Economy

20.79 Crore Indians Are 'Multidimensionally Poor', Urban-Rural Divide a Concern: Niti Aayog

While Niti Aayog's latest Multidimensional Poverty Index (MPI) considers 14.96% of India's population as poor, the recently released MPI by UNDP put the figure at 16.4%, based almost on the same indicators.

New Delhi: The Niti Aayog’s second edition of the Multidimensional Poverty Index (MPI) has projected that about 14.96% of the Indian population is ‘multidimensionally’ poor. In absolute terms, 207.9 million (20.79 crore) Indians are poor and face deprivation in multiple development areas, as per population projections for the year 2021. Though this report also claimed that the multidimensional poverty in India has declined from 24.85% to 14.96% between 2015-16 and 2019-21.

The primary data source to arrive at these figures was National Family Health Survey-5 (NFHS-5). The key verticals used when arriving at the national MPI were health, education, and standard of living. 

Further, these three key verticals had several indicators which were weighed into calculating what is known as ‘deprivation score’. The following figure, sourced from the Niti Aayog report, explains the weight given to each factor: 

Indicators used by Niti Aayog in calculating India’s multidimensional poverty index.

The deprivation score is the sum of the weighted status of all the indicators for an individual. If the deprivation score is more than 0.33, only then an individual is considered multidimensionally poor, even if s/he is poor as per some of the indicators. 0.33 (or 33%) is considered the standard cutoff globally, the report said. 

Recently, the UNDP released the global multidimensional poverty index. It released MPIs for all individual countries also. In the case of India – just like Niti Aayog – it also used NFHS-5 data. However, according to the global MPI, or the percentage of people living in multidimensional poverty, in India 16.4 as compared to 14.96% of the Niti Aayog. 

A difference of 1.44% points is significant in absolute numbers considering India’s high population. In other words, another 20 million people of India are multidimensionally poor according to the UN, while Niti Aayog doesn’t think so. 

Most of the indicators used for computing global MPI by the UN and national MPI by Niti Aayog are also the same. Except for the fact that Niti Aayog takes into account two more factors  – maternal mortality and opening of the bank accounts (more on this later).

Major findings

The Niti Aayog report says that though there has been a decline in the incidence of poverty, the urban-rural divide still remains a matter of concern as the proportion of multidimensional poor was 19.28% of the Indian population while in urban areas it stood at 5.27%, in 2019-21.  As far as indicator-wise performance is concerned, 31.52% of the Indian population is still considered deprived as far as access to optimum nutrition services are concerned, in the current assessment – though the deprivation has come down by about 6% points as compared to the previous one. 

The Union government ministers have on many occasions claimed that India has become open defecation free but this Niti Aayog report also showed that 30.13% of the population is deprived when it comes to sanitation services and 43.90% of people are deprived when it comes to access to cooking fuel. 

While the above charts showed the proportion of the population falling deprived vis-a-vis various indicators, if there is one indicator that has contributed the maximum to multidimensional poverty, it was clearly nutrition, the report showed. 

In other words, which deprivations are making the poor, ‘poor’? 

Lack of proper nutrition contributed to the tune of 29.86% in the calculation of India’s multi-poverty index. “Contributing to nearly one-third of the multidimensional poverty in India, nutrition is arguably one of the most important indicators in India’s national MPI,” the report says. 

Children in an Odisha school eat their midday meal. Photo: mdmodisha.nic.in.

As an indicator, lack of nutrition services was followed by lack of years of schooling (16.65%), inadequate access maternal health services (11.73%), less-than-desired school attendance (9.10%), lack of access to proper cooking fuel (8.82%), housing needs (8.65%), sanitation services (6.63%), ownership of assets (3.39%) and the other factors whose contribution was 0-2%. The other factors included child-adolescent mortality (1.48%), electricity (1.32%), drinking water (1.60%) and bank account (0.78%).

In terms of the performance of states, Bihar has shown the highest reduction in multidimensional poverty in the current assessment vis-a-vis the last one. Although this should not come as a surprising finding because Bihar had the highest percentage of people living with multidimensional poverty across India. The following chart explains the status of states and the reduction of poverty between the two assessment periods of the Niti Aayog.

States and indicators

As far as indicator-wise and state-wise performance is concerned, Bihar, with 42.20% of the population deprived of proper food, stood at the top of deprivation of the ‘nutrition’ indicator. It was followed by Jharkhand (40.32%), Gujarat (38.09%), Uttar Pradesh (36.43), and Chhattisgarh (35.12%). According to the report, a woman of 15 to 49 years or a man of 15 to 54 years is considered undernourished if their body mass index (BMI) is below 18.5 kg/m2. The children under five years are considered malnourished if their z-score of height-for-age (stunting) or weight-for-age (underweight) is below minus two standard deviations from the median of the reference population.

A household is considered deprived as per ‘child and adolescent mortality’ if any child or adolescent under 18 years of age has died in the household in the five-year period preceding the survey. Factors such as lack of access to healthcare, infectious diseases, malnutrition, iron deficiency (anemia), or an unsafe environment are all contributors to child and adolescent mortality, the Niti Aayog report said quoting the WHO.

The death of a child or adolescent may therefore indicate the deprivations experienced by a household in one or more of these factors, the report says. In this indicator also, Bihar has 4.14% of the population deprived – the highest. It is followed by Uttar Pradesh (3.54%), Meghalaya (2.99%), Jharkhand (2.57%), and Chhattisgarh (2.33%). 

A household is considered deprived if any woman in the household who has given birth in the five years preceding the survey has not received at least four antenatal care visits for the most recent birth or has not received assistance from trained and skilled medical personnel during the most recent childbirth. 

This factor is not included in the calculation of global MPI by the UN. Experts in India too have questioned the inclusion of this factor in the MPI owing to the fact that almost 80% of deliveries in India are now ‘assisted’ or take place in an institution like hospital. Therefore, since the performance under this indicator would be good, it would overall help in decreasing the MPI, offsetting the impact of other indicators. [hyperlink]

In fact, studies like this have also shown that an increased institutional delivery rate didn’t translate into a proportionally better survival of newborns. “This analysis of 191,963 births in India found that without high-quality district health systems, health system coverage is insufficient to save newborn lives….Current policies and expenditure mostly aim at increasing institutional delivery. However, our findings indicate that they will fail to improve newborn survival where health system quality for maternity services is inadequate…. These findings underscore the need to address both access and quality of health services in efforts to reduce the burden of avertable newborn deaths,”  the paper says. 

Nonetheless, Bihar topped the chart in terms of deprivation of this indicator with 37.21% of the population deprived. Meghalaya (31.3%), Uttar Pradesh (30.03%), Jharkhand (29.75%) and Arunachal Pradesh (22.21%) came next. 

Under the ‘education’ vertical, two factors have been considered – schooling and school attendance. A household is deprived if not even one member of a household aged 10 years or older has completed six years of schooling. Bihar performed the worst followed by Meghalaya, Jharkhand, Andhra Pradesh, and Telangana. Similarly, a household is deprived if any school-aged child is not attending school up to the age at which he/she will complete class 8. Uttar Pradesh ranked top in terms of this deprivation followed by Bihar, Jharkhand, Meghalaya and Madhya Pradesh.

Middle-aged children learning in a classroom. Credit: PTI

Representational image. Photo: PTI

Under the ‘standard of living’ vertical, seven indicators have been taken into account. If a household does not have ‘exclusive’ access (non-shared) to any kind of toilet, it would be considered deprived under the ‘sanitation’ indicator. In Bihar, 50.78% of the population does not have the requisite access. Jharkhand (43.36%), Odisha (39.85%), Madhya Pradesh (35.51%) and Manipur (35.23%) figured next in decreasing order. 

A household is deprived under the category of ‘cooking fuel’ if the primary source of fuel is dung, agricultural crops, shrubs, wood, charcoal, or coal. Jharkhand had the highest percentage of the population deprived – 69.12% – under this indicator. It was followed by Meghalaya, Chhattisgarh, Odisha and Bihar.  

For a household not to be considered deprived as per the ‘drinking water’ indicator, it should have access to a source of safe drinking water or safe drinking water is more than a 30-minute walk from home (as a round trip). In this indicator, the deprivation seemed relatively lesser worse as compared to others. Manipur fared the worst for this indicator with 26.77% people considered deprived as per the  Niti Aayog definition. Meghalaya, Madhya Pradesh, Jharkhand and Assam come after Manipur in the decreasing order. 

If a household has no electricity, it would be considered deprived. This is one parameter on which some of the worst-performing states, as per the last assessment, seem to have made a huge comeback;  at least on paper. 

Consider Uttar Pradesh. For the previous assessment period, 27.43% of the population was deprived. Now, the corresponding figure stands at only 9.16%. Similar is the story of Bihar where 39.86% of the population was deprived of electricity in 2015-16, and in 2019-21, only 3.67% of the population did not have access to electricity. 

For housing needs, a household has to have a floor and roof – both – not made of any rudimentary materials like mud, clay or dung, to be not considered deprived. Manipur, with  75.50% of the population not having access to a pucca house fared worst followed by Arunachal Pradesh (74.34%), Assam (69.37%), Tripura (66.83%) and Bihar (65.37%)

Bank account is yet another indicator under the standard of living vertical. This indicator also does not form part of the UN’s global MPI calculations. The Niti Aayog report showed a large part of the population has a bank account. With just 9.01% of the population not having a bank account, Meghalaya became the worst performing state. Overall, as per Niti report, 96% people in India have bank accounts with only 4% population deprived of them.

But experts have questioned the mere existence of a bank account as a development indicator for the calculation of MPI because existence of a bank account doesn’t necessarily lead to financial inclusion. Reports like this show that the ownership of bank accounts have stagnated during the pandemic years, ownership of debit/credit cards has decreased and fewer people are saving in financial institutions. 

The last indicator is ‘asset ownership’. The household is deprived if it does not own more than one of these assets: radio, TV, telephone, computer, animal cart, bicycle, motorbike, or refrigerator, and does not own a car or truck. In Meghalaya, 37.07% of the population didn’t have the required ownership. People in Nagaland, Bihar, Madhya Pradesh and Jharkhand figured next, in decreasing order, as far as lack of ownership of the assets was concerned.