Multidimensional Poverty Index (MPI) 2023

The editorial analysis on “Multidimensional Poverty Index (MPI) 2023” covers its data highlights, significance, challenges for India and way ahead.

In News

• Estimates of poverty reduction by a United Nations agency offer cause for satisfaction.

About the Global Multidimensional Poverty Index (MPI)

• This report presents a compact update on the state of multidimensional poverty in the world. 
• It compiles data from 110 developing countries covering 6.1 billion people, accounting for 92 percent of the population in developing countries. 
• It tells an important and persistent story about how prevalent poverty is in the world and provides insights into the lives of poor people, their deprivations and how intense their poverty is—to inform and accelerate efforts to end poverty in all its forms. 
• MPI is published annually by the UN Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative.

Data Highlights of MPI 2023

• Reduction in global MPI values:
  • According to the report, 25 countries, including India, successfully halved their global MPI values within 15 years, showing that rapid progress is attainable. 
  • These countries include Cambodia, China, Congo, Honduras, India, Indonesia, Morocco, Serbia, and Vietnam.
• Data on India:
  • As many as 415 million people in India were lifted out of poverty from 2005-06 to 2019-21, according to the latest update of its global Multidimensional Poverty Index. 
  • This would be a substantial fraction of our population, now estimated at over 1.4 billion. 
  • Those who are poor and deprived of cooking fuel fell from 52.9% to 13.9%, and those short of proper sanitation from 50.4% to 11.3%. 
  • The report noted that deprivation in all indicators declined in India and the poorest States and groups, including children and people in disadvantaged caste groups, had the fastest absolute progress.
• Lack of data during COVID:
  • The report demonstrates that poverty reduction is achievable. However, the lack of comprehensive data during the period of the COVID-19 pandemic poses challenges in assessing immediate prospects.
• Regions with existing poverty:
  • According to the 2023 release, 1.1 billion out of 6.1 billion people (just more than 18%) live in acute multidimensional poverty across 110 countries. 
  • Sub-Saharan Africa (534 million) and South Asia (389 million) are home to approximately five out of every six poor people.
  • Nearly two-thirds of all poor people (730 million people) live in middle-income countries, making action in these countries vital for reducing global poverty. 
  • Although low-income countries constitute only 10% of the population included in the MPI, these are where 35% of all poor people reside.

Significance of India’s Success

• Some of these gains may have the current government’s social development schemes to thank. 
• Rapid economic expansion has been criticized for not benefiting the poor, but these estimates suggest that fast growth is indeed improving the lives of those who are the worst off. 
• While there are signs of the pandemic having set poverty reduction back, we don’t have adequate data to draw conclusions. Still, India’s direct poverty-relief efforts mustn’t slacken even as we pursue output growth.

Challenges for India

• Levels of nutrition:
  • While poverty levels have not worsened, levels of under-nutrition are still very high. 
  • There is no marked acceleration in rate of improvement between NFHS-3 and NFHS-4 and NFHS-4 and NFHS-5. 
  • And the MPI mainly captures the pre-COVID situation because 71% of the NFHS-5 interviews were pre-COVID.
• Focussing on existing vulnerable population: 
  • India still has more than 230 million people who are poor. 
  • According to the MDI report, one should take the population “vulnerable” to multidimensional poverty seriously. 
  • The UNDP defines, “Vulnerability — the share of people who are not poor but have deprivations in 20–33.3 percent of all weighted indicators — can be much higher.” India has some 18.7 per cent population under this category.

Way Ahead

• India faces three rather acute and growing problems: 
  • Widespread unemployment, 
  • Widening inequalities and 
  • Deepening poverty
• India surpassed China to become the world’s most populous nation with 142.86 crore people, according to UN data. 
• India’a problems require actual policy solutions. Without the right policies, India’s demographic dividend is looking more like a demographic bomb.

Read our detailed article on Multidimensional Poverty Index: Dimensions, Report, Significance & Limitations

Question for Practice

[Q] What is the significance & reasons for India’s success in the Global Multidimensional Poverty Index (MPI)? What are the  challenges remained for the country? Suggest ways to overcome them.