Poverty reduction is achievable if tackled pragmatically

At the outset, it is heartening to note that 25 countries halved their multidimensional poverty well within fifteen years as stated by ‘Global Multidimensional Poverty Index (MPI) Report 2023’, which was released jointly by United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative. Globally speaking, the report has mentioned that across 110 countries, 1.1 billion out of 6.1 billion people are poor while 18 per cent are estimated to be living in acute MPI.

The incidence of poverty has shown that 534 million (53.4 crore) out of 1.1 billion poor people-nearly half of all poor people- live in Sub-Saharan Africa followed by South Asia with 389 million (38.9 crore) representing over a third of all poor people. It needs to be mentioned that 730 million, nearly two thirds of all poor people live in low-income and middle-income countries reflecting that the poverty is concentrated in developing nations.

It needs to be emphasized that 824 to 991 million people do not have access to adequate sanitation, housing and cooking fuel while 600 million poor people live with at least one person, who is undernourished in a household. Added to it, the gaps in ‘years of schooling’ are a cross-regional issue.

All these denote deprivation of basic living standards by poor people in different parts of the developing world. Again within developing nations, poverty is persisting among poor and vulnerable sections disproportionately affecting children and women. This needs proper policy formulation in order to reduce MPI value.

It has been established in the Global MPI Report 2023 that children are disproportionately affected and they form half of the total poverty in many countries. Hence, understanding ‘multidimensional child poverty’, their levels and factors responsible for it from a public policy perspective is useful in the case of India, Ethiopia, Bangladesh and Nepal wherein the child population is very high.

Significance of multidimensional poverty:

In fact, the concept of poverty line has undergone changes from mere income poverty measurement (World Bank norm of $ 2.15) to non-monetary aspects of life and deprivation of basic amenities, which, when provided, will improve the quality of life.

Towards this, UNDP has introduced multidimensional poverty with three dimensions of well-being viz., health, education and living standards and ten indicators with due weights. They include; nutrition, child mortality under ‘health’, years of schooling and school attendance under ‘education’, cooking fuel, sanitation, drinking water, electricity, housing and assets under ‘living standards’. Apart from income poverty, the non-monetary poverty indicators are considered given that many are deprived of these indicators in their life.

MPI complements monetary poverty measures by capturing additional information including aspects of life, like child mortality, housing conditions and other basic services such as water and sanitation. It also captures overlapping deprivations in three dimensions of well-being mentioned above. The MPI value not only provides the extent of poverty in terms of head count ratio but also tells the depth of poverty. It not only talks about ‘how many are poor’ but also ‘how poor are the poor’ the latter being the essential understanding for designing proper policies at various levels.

Extent of poverty:

India has done a commendable job and has shown a significant decline in poverty, if not half. It has been able to reduce poverty by 9.89 percentage points from 24.85 per cent in 2015-16 to 14.96 per cent in 2019-2021, more importantly; rural areas, compared to urban areas, experienced a faster decline in poverty from 32.59 per cent to 19.28 per cent. In fact, it has shown the consistent efforts of the governments in addressing the issues pertaining to health, education and living standards of people among others.

Efforts of NITI Aayog:

Following the Global report, NITI Aayog released its own report titled “National Multidimensional Poverty Index, A Progress Review 2023”, (based on NFHS-5). This provided data not only at national and state levels but also at the district-level, which is quite appreciative.

As a result, we can know the districts that are poverty-stricken and the percentage of population who are multi-dimensionally poor in a district. This will will come in handy for policy purposes. Because, ‘one size fits all’ does not hold good and the policy for poverty alleviation needs to be designed based on the needs of the district.

Besides, the national level report has added two more indicators to the list of ten. They are ‘maternal health’ in health category and ‘bank accounts’ in standard of living category. Further, one indicator has been broadened i.e., ‘child and adolescent mortality’ instead of child mortality.

The national level data shows that India is on track to achieve SDG target 1.2 i.e., ‘reducing multidimensional poverty by at least half much ahead of 2030’. It has been supported by 12 indicators that have shown improvement due to government interventions in the last six years. Further, five states recorded the steepest decline in the number of MPI poor (in terms of head count ratio), including Uttar Pradesh, Bihar, Madhya Pradesh, Odisha and Rajasthan. The five states, which were dubiously known as BIMARU states, have done remarkably well in reducing poverty. When we look at the indicators, improvement in nutrition, years of schooling, sanitation, and cooking fuel played an important role in reducing the MPI value. In fact, the MPI value in the case of India has come down from 0.117 to 0.066, which is something significant, during 2015-16 to 2019-21. About 135.5 million persons have come out of poverty between 2015-16 and 2019-21. Besides, the intensity of poverty, which measures the average deprivation among the multi-dimensionally poor, has fallen from 47.14 per cent to 44.39 per cent.

Furthermore, the national level report has provided disaggregate data about each and every district, which is very useful for policy making.

When looked at poverty in terms of head count ratio, the percentage of population multi-dimensionally poor in each state shows that it is still high in Bihar (33.76 per cent), Jharkhand (28.81 per cent), Meghalaya (27.79 per cent), UP (22.93 per cent) and MP (20.3 per cent). Despite the strides in the last six years, they still need attention given the huge population and their needs.

On the other hand, the states that have performed very well include Kerala, Goa, Tamil Nadu, Sikkim, Punjab and Himachal Pradesh.

However, it is of policy relevance to understand the factors behind the multidimensional poverty especially the ‘child poverty’, levels of MPI, high intensity of poverty in each and every state and take the required measures.

This will go a long way in improving their condition in countries like India and others. The reason is that child poverty is something different from adult poverty as their needs are different from adults in a household. Hence, we should look at the differences across children of the same age and children in the same household with that of adults in a household.

(The writer is a noted economist, former consultant with UNICEF, Indonesia and Advisor to Satavahana Development Society, Hyderabad)