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NITI Aayog has released the state-wise National Multidimensional Poverty Index or MPI in line with the global index released by the United Nations each year. According to Global MPI 2021, India’s rank is 66 out of 109 countries. The National MPI Project is the first attempt in years to define poverty measures and is aimed at deconstructing the Global MPI and creating a globally aligned and yet customised India MPI. The MPI is based on three dimensions — health, education, and standard of living — with each having a weighting of one-third in the index. The household micro data collected at the unit-level for the NFHS serves as the basis of the computation of National MPI. This unit level micro data collected in 2015-16 has been used in the current MPI report to derive an idea of baseline multidimensional poverty i.e. where the country was with respect to MPI before full-scale roll out of the above mentioned schemes. The MPI identifies 25.01 per cent of the population as multidimensionally poor. The progress of the country with respect to this baseline will be measured using the NFHS-5 data collected in 2019-20.

Key highlights of the index-

  • It was developed by the NITI Aayog in consultation with 12 ministries and in partnership with state governments and the index publishing agencies, namely, Oxford University’s Oxford Poverty and Human Development Initiative (OPHI) and United Nations Development Programme (UNDP).
  • 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.
  • It is calculated using the household microdata collected at the unit-level for the NFHS-4 (which was conducted between 2015 and 2016) that is used to derive the baseline multidimensional poverty.
  • NFHS is conducted by the International Institute for Population Sciences (IIPS) under the Ministry of Health and Family Welfare.
  • The Index is calculated using 12 indicators – nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account that have been grouped under three dimensions namely, health, education and standard of living.
  • According to Global MPI 2021, India’s rank is 66 out of 109 countries.
  • The NMPI enables estimation of poverty not only at the level of the states but also for all the 700-plus districts across the 12 indicators, capturing simultaneous deprivations and indicator-wise contribution to poverty.
  • As per NMPI, Bihar also has the highest number of malnourished people followed by Jharkhand, Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.
  • Kerala, Goa, and Sikkim have the lowest percentage of population being multidimensionally poor at 0.71 per cent, 3.76 percent and 3.82 per cent, respectively.
  • Among the Union Territories (UTs), Dadra and Nagar Haveli (27.36 per cent), Jammu & Kashmir, and Ladakh (12.58), Daman & Diu (6.82 per cent) and Chandigarh (5.97 per cent), have emerged as the poorest UTs in India.
  • The proportion of poor in Puducherry at 1.72 percent is the lowest among the Union Territories, followed by Lakshadweep at 1.82 per cent, Andaman & Nicobar Islands at 4.30 per cent and Delhi at 4.79 percent.

Why are poverty numbers important?

  • The PLB has been the subject of much debate. The 1962 group did not consider age and gender-specific calorie requirements.
  • Expenditure on health and education were not considered until the Tendulkar Committee — which was criticized for setting the poverty line at just Rs 32 per capita per day in urban India (and at Rs 27 in rural India).
  • And the Rangarajan Commission was criticized for selecting the food component arbitrarily — the emphasis on food as a source of nutrition overlooks the contribution of sanitation, healthcare, access to clean water, and prevalence of pollutants.
  • Poverty numbers matter because central schemes like Antyodaya Anna Yojana (which provides subsidided foodgrains to households living below the poverty line) and Rashtriya Swasthya Bima Yojana (health insurance for BPL households) use the definition of poverty given by the NITI Aayog or the erstwhile Planning Commission.
  • The Centre allocates funds for these schemes to states based on the numbers of their poor. Errors of exclusion can deprive eligible households of benefits.

Challenges posed by poverty to Indian society:

  • Inequality: After 1991 reforms it is argued that there is increasing inequality in India. According to an Oxfam report, India’s top 1% of the population now holds 73% of the wealth.
  • Regional imbalances: This is leading to new demands for state formation and may further lead to fissiparous tendencies.
  • Crime: Poverty increases crime rate in the society leading to issues of security of women and other social evils.
  • Poverty is a vicious cycle and it is difficult for any society to come out of it and its consequences.
  • Women in the society suffer more because of poverty.
  • The vulnerable sections of SCs ,STs and Minorities are most affected due to poverty and because of this poverty , the Naxalism and Radicalisation of  Youth still holds sway in these sections.
  • Poverty and Naxalism: Poverty and inhuman existence of tribals is a plausible reason for Naxalites to seduce the tribal youth into Naxalism.


  • Poverty can effectively be eradicated only when the poor start contributing to growth by their active involvement in the growth process.
  • This is possible through a process of social mobilization, encouraging poor people to participate and get them empowered.
  • This will also help create employment opportunities which may lead to increase in levels of income, skill development, health and literacy.
  • Moreover, it is necessary to identify poverty stricken areas and provide infrastructure such as schools, roads, power, telecom, IT services, training institutions etc.