Why is it in the News?

Recently, In her Interim Budget speech, the Union Finance Minister informed that nearly 25 crore people have been raised from multi-dimensional poverty in the last 10 years.

What is Multidimensional Poverty?

• Multidimensional Poverty refers to the complex nature of poverty, where individuals or communities experience various simultaneous disadvantages.
  • These may include inadequate health, malnutrition, limited access to clean water and electricity, substandard living conditions, and limited educational or employment opportunities.
• Merely focusing on income as a poverty indicator fails to fully grasp the depth and breadth of deprivation experienced by individuals.
  • Multidimensional Poverty recognizes that poverty encompasses more than just economic factors; it encompasses a range of dimensions that impact well-being and quality of life.
• This approach to measuring poverty incorporates not only income or consumption levels but also considers deprivations in education and access to essential infrastructure.
  • The international poverty line, set at $2.15 per day (in 2017 purchasing power parity terms) by the World Bank, serves as a benchmark for evaluating monetary value but is complemented by a broader assessment of various dimensions of deprivation.

What is the Global Multidimensional Poverty Index?

• The Global Multidimensional Poverty Index (MPI) serves as a vital tool for assessing acute multidimensional poverty in over 100 developing nations.
• Published collaboratively by the Oxford Poverty and Human Development Initiative (OPHI) and the UNDP's Human Development Report Office, it provides a comprehensive framework for tracking deprivation across three key dimensions and ten indicators.
• This index operates on a scale from 0 to 1, with higher values indicating greater levels of poverty.
• According to MPI methodology, individuals experiencing deprivation in a third or more of the weighted indicators are classified as "MPI poor."

India's Progress and Comparison:

• According to the 2023 Global MPI report, India successfully uplifted 415 million people out of poverty between 2005-06 and 2019-21, marking a significant achievement in poverty alleviation efforts.
  • India is among 25 nations that have effectively halved their global MPI values within 15 years.

Comparison with India's National MPI:

• In addition to the global MPI, India has its own National Multidimensional Poverty Index.
• Published by NITI Aayog, India's MPI incorporates two additional indicators:
  • Maternal health (under the health dimension) and
  • Bank account ownership (under the standard of living dimension).
• This modification aligns the MPI with India's specific national priorities, offering a nuanced understanding of poverty dynamics within the country.