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EDITORIAL ANALYSIS : Poverty, Uncensored


Source: Indian Express

  • Prelims: Current events of national importance(Different social service Schemes, MPI)
  • Mains GS Paper I & II: Social empowerment, development and management of social sectors/services related to Health, poverty and hunger etc


  • There is a claim that poverty decline accelerated under the present government across the full range of 10 deprivations used in the calculation of “multidimensional poverty” (MP).
  • NITI Aayog(using sample survey data of NFHS 4) estimated the Multidimensional Poverty Index (MPI).




Multidimensional Poverty Index (MPI):

  • The MPI seeks to measure poverty across its multiple dimensions and in effect complements existing poverty statistics based on per capita consumption expenditure.
  • It has three equally weighted dimensions:
    • Health
    • Education
    • Standard of living
  • Indicators: These three dimensions are represented by 12 indicators such as: nutrition, school attendance, years of schooling, drinking water, sanitation, housing, bank accounts among others.
  • Global Multidimensional Poverty Index: It is released by the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative (OPHI).


Basis used for poverty determination:

  • Deprivation-specific “headcount ratios” (HCRs): the percentage of deprived persons in the population.
    • The Head Count Ratio (HCR) is the percentage of a population that falls below the Poverty Line.
  • The deprivations of interest are those commonly used in MPI calculations: health, education and household amenities
  • 2011-12 estimates based on the second India Human Development Survey (IHDS-2).
  • Compare the annual rate of decline of deprivation-specific HCRs before and after 2011-12.


What was the result?

  • The rate of decline of HCRs: It was higher after 2011-12 even “eight times higher” on average.


What are the issues associated with the claim?

  • 2005-06 figures from an outdated MP series: Comparison between 2005-06 and “2011-12” is actually a comparison between two different sets of estimates for 2005-06 (indeed, the respective figures are very close to each other).
    • The comparison between “2011-12” and 2019-21 is actually a comparison between 2005-06 and 2019-21.
  • Figures projected as indicator-specific HCRs: They are not headcount ratios. They are “censored headcount ratios.
  • India Human Development Survey (IHDS) data: It is not comparable with NFHS in any case.
  • Censored HCR: Even if there is no improvement in nutrition, the censored HCR for nutrition deprivation would decline over time simply because multidimensional poverty is declining.


Actual HCR data:


  • The rate of HCR decline was not uniformly faster in the second period: It was faster for most household amenities, but slower for most other indicators.
  • In MPI: The convention is to give equal weight (one third each) to health, education and amenities, and then equal weight to individual indicators within each domain.
    • Based on the conventional MP weights: overall rate of decline of deprivation was the same in both periods.
  • Multidimensional poverty” HCR: It declined faster in the second period.
    • The fast decline of multidimensional poverty in the second period is largely driven by the rapid improvement of amenities.
  • The rate of growth of per-capita consumption(according to national accounts figures): crashed in the second period (after the demonetisation self-goal).


Government initiatives:



Way Forward

  • None of these MP-related indicators capture short-term purchasing power: amenity improvements in the second period are more a reflection of public policy and subsidies than rising incomes.
  • The next NSSO consumer expenditure survey and third India Human Development Survey They will soon make figures more clear.
  • Address deprivations across the entire population: In order to reduce the Intensity of Poverty we need to address deprivations across the entire population, that is there should be a universal approach instead of a targeted approach to addressing it.
  • Programmatic interventions should be curated with ground-level realities: The survey data gives us only broad policy pointers whereas programmatic interventions should be curated with ground-level realities.
    • Continuous engagement with survey data in terms of improving the sample design and response quality has to be sustained.



Q. Can the vicious cycle of gender inequality, poverty and malnutrition be broken through microfinancing of women SHGs? Explain with examples.(UPSC 2021)  (200 WORDS, 10 MARKS)