NEW DELHI: The big poverty debate that refuses to die down has been reignited by the recent Niti Aayog report on the National Multidimensional Poverty Index (MPI). As per the recent MPI report, which measures 'poverty' beyond the income parameter, 14.96% of the population in India was multidimensionally poor during 2019-21, a sharp decline from the 2015-16 level of 24.85%.
And even though multidimensional poverty is different from the traditionally measured poverty level measured through consumption expenditure, it has refuelled the poverty debate.
The National MPI measures simultaneous deprivations across the three equally weighted dimensions of health, education, and standard of living that are represented by indicators such as nutrition, child and adolescent mortality, maternal health, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets, and bank accounts.
But does it correctly represent the poverty level in India?
"Poverty is an income concept. Multidimensional index is a deprivation concept – they are two different things," says Pronab Sen, the former chief statistician of India.
He adds that the multidimensional poverty index actually measures deprivation, and deprivation may or may not have anything to do with poverty.
He explains: "Think of an old zamindar. He lives in the old family mansion -- a pakka house-- but he is broke. But in terms of the multidimensional poverty index, he may not be so."
Amit Basole, Associate Professor of Economics, School of Arts and Sciences, at Azim Premji University, says that the Multidimensional Poverty Index is not a substitute for the traditional way of measuring poverty.
According to him, multidimensional poverty captures slightly different indicators such as standard of living, etc.
"If you think about educational attainment, as more and more people are getting educated, there will be a reduction in multidimensional poverty. Now, it is possible that this educational attainment is achieved by borrowing or selling assets rather than an increase in people's income," explains Basole.
Purpose of a multidimensional poverty index?
According to Sen, it is very useful for targeting government social expenditures. “It helps in determining where the fault lies within the education system, health system or the housing system. You can find where the problem is, so you can target those,” says Pronab Sen.
He further stressed that MPI is very useful for targeting, but completely useless for measuring poverty.
According to Basole, MPI and income and consumption surveys should complement each other to arrive at the larger picture.
"We should have data on income and expenditure and we should also have data on these kinds (MPI) of outcomes. We should put them together, and see if overall things are improving along all the dimensions including income," he says.
The confusion over poverty level
According to experts, the official way in which we have been measuring poverty (through the consumer expenditure survey) is not available, which is why people have been using different approaches.
Some people use the Periodic Labour Force Survey (PLFS) consumption data, some people have been using the CMIE data.
Comparability becomes an issue in all of these, feels Basole.
The earlier poverty number of 23% was based on the Consumer Expenditure Survey conducted by NSSO in 2011-12. The
Until new numbers come out – which will come out soon – we have no comparable number to that 22-23%. The Consumer Expenditure Survey of 2017-18 was junked by the government after the survey findings indicated fall in consumer spendings.
However, the latest round of the survey having been conducted recently, and the report of which is likely to come in by next year, experts are hopeful that the cloud over India’s poverty number finally gets cleared.