Multidimensional Poverty Index — Revision Notes

⚡ 30-Second Revision

MPI: Multidimensional Poverty Index.
Nodal Agency: NITI Aayog.
Data Source: National Family Health Survey (NFHS).
Dimensions: Health (1/3), Education (1/3), Living Standards (1/3).
Indicators: 10 total (Health: Nutrition, Child & Adolescent Mortality, Antenatal Care; Education: Years of Schooling, School Attendance; Living Standards: Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets).
Methodology: Alkire-Foster (AF) method, Dual Cutoff.
Poverty Cutoff: Deprived in >= 1/3 of weighted indicators.
MPI = Headcount Ratio (H) * Intensity of Deprivation (A).
NITI Aayog 2023 Report (NFHS-5): MPI 0.066, Headcount 14.96%, 135 million lifted (2015-16 to 2019-21).
Top 5 States (Lowest MPI): Kerala, Goa, Sikkim, Tamil Nadu, Punjab.
Bottom 5 States (Highest MPI): Bihar, Jharkhand, Uttar Pradesh, Meghalaya, Madhya Pradesh.
Linkage: SDG 1.2 (No Poverty).

2-Minute Revision

The Multidimensional Poverty Index (MPI) is a crucial tool for understanding poverty beyond just income. Spearheaded by NITI Aayog in India, it uses data from the National Family Health Survey (NFHS) to identify individuals who are simultaneously deprived across three equally weighted dimensions: Health, Education, and Living Standards.

These dimensions are broken down into ten specific indicators, each with defined deprivation thresholds. For instance, 'Nutrition' and 'Antenatal Care' fall under Health, 'Years of Schooling' and 'School Attendance' under Education, and 'Sanitation', 'Cooking Fuel', 'Electricity', 'Drinking Water', 'Housing', and 'Assets' under Living Standards.

The MPI employs the Alkire-Foster method, using a 'dual cutoff' approach: first, identifying deprivation in each indicator, and second, classifying a household as multidimensionally poor if it is deprived in at least one-third of the weighted indicators.

The final MPI score is a product of the Headcount Ratio (proportion of poor) and the Intensity of Deprivation (average deprivations among the poor). Recent NITI Aayog reports, notably the 2023 Progress Review based on NFHS-5, show significant strides, with India lifting approximately 135 million people out of multidimensional poverty between 2015-16 and 2019-21, and the national MPI value declining to 0.

066. This progress is largely attributed to the effective implementation of government schemes targeting these specific deprivations, aligning India's efforts with Sustainable Development Goal 1.2.

5-Minute Revision

The Multidimensional Poverty Index (MPI) offers a comprehensive and nuanced perspective on poverty, moving beyond the traditional income-centric view. In India, NITI Aayog is the nodal agency for the National MPI, utilizing data from the National Family Health Survey (NFHS) to provide a robust measure of deprivation.

The MPI framework is built upon three equally weighted dimensions: Health, Education, and Living Standards. Each dimension is further disaggregated into specific indicators, totaling ten. Under Health, we find Nutrition, Child & Adolescent Mortality, and Antenatal Care.

Education comprises Years of Schooling and School Attendance. The Living Standards dimension includes Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, and Assets. Each of these indicators has a precise deprivation threshold (e.

g., using solid cooking fuel, no improved sanitation). The calculation methodology, known as the Alkire-Foster method, involves a 'dual cutoff'. First, it identifies whether a household is deprived in each indicator.

Second, it identifies a household as multidimensionally poor if its total weighted deprivation score is equal to or greater than 1/3. The final MPI value is a composite of the Headcount Ratio (the proportion of the population that is multidimensionally poor) and the Intensity of Deprivation (the average proportion of weighted deprivations experienced by the poor).

This allows for a deeper understanding of both the incidence and depth of poverty. Recent NITI Aayog reports, particularly the 2023 Progress Review based on NFHS-5 (2019-21), highlight India's remarkable progress.

The national MPI value has significantly reduced from 0.117 (2015-16) to 0.066, leading to approximately 135 million people exiting multidimensional poverty. States like Uttar Pradesh, Bihar, and Madhya Pradesh have shown the fastest reduction.

This progress is a testament to the targeted implementation of government schemes such as Swachh Bharat Mission (Sanitation), Pradhan Mantri Ujjwala Yojana (Cooking Fuel), Ayushman Bharat (Health), and Jal Jeevan Mission (Drinking Water), which directly address the MPI indicators.

The MPI is a critical policy tool for monitoring India's progress towards Sustainable Development Goal 1.2 and other related SDGs, enabling evidence-based policymaking and fostering inter-sectoral convergence for inclusive growth.

While it offers significant advantages, limitations include data lag and potential subjectivity in indicator selection, necessitating continuous refinement and robust data collection.

Prelims Revision Notes

1
MPI Basics: — Multidimensional Poverty Index, measures acute poverty across multiple dimensions. Nodal agency: NITI Aayog. Data source: NFHS.
2
Dimensions & Weights: — 3 dimensions, equally weighted (1/3 each): Health, Education, Living Standards.
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10 Indicators & Weights:

* Health (1/9 each): Nutrition, Child & Adolescent Mortality, Antenatal Care. * Education (1/6 each): Years of Schooling, School Attendance. * Living Standards (1/18 each): Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets.

1
Deprivation Thresholds: — Specific criteria for each indicator (e.g., solid fuel for cooking, no improved sanitation, no member completed 6 years of schooling).
2
Calculation (Alkire-Foster): — Dual cutoff method. Household is MPI poor if deprived in >= 1/3 of weighted indicators.
3
MPI = H x A: — H (Headcount Ratio - % poor), A (Intensity of Deprivation - avg deprivations among poor).
4
NITI Aayog MPI 2023 (NFHS-5, 2019-21):

* MPI Value: 0.066 (down from 0.117 in 2015-16). * Headcount Ratio: 14.96% (down from 24.85%). * People lifted: ~135 million. * Intensity of Deprivation: 43.92% (down from 47.14%). * Fastest Reduction: UP, Bihar, MP, Odisha, Rajasthan. * Lowest MPI States: Kerala, Goa, Sikkim, Tamil Nadu, Punjab. * Highest MPI States: Bihar, Jharkhand, Uttar Pradesh, Meghalaya, Madhya Pradesh.

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Key Schemes & MPI Linkage:

* Sanitation: Swachh Bharat Mission. * Cooking Fuel: PM Ujjwala Yojana. * Drinking Water: Jal Jeevan Mission. * Health/Nutrition: Ayushman Bharat, POSHAN Abhiyaan. * Housing: PM Awas Yojana. * Electricity: Saubhagya Scheme.

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SDG Linkage: — Directly monitors SDG 1.2 (No Poverty) and contributes to others (SDG 3, 4, 6, 7, 11).
2
Comparison: — MPI vs. Income Poverty (multi-dimensional vs. monetary), MPI vs. HDI (individual poverty vs. national development).

Mains Revision Notes

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MPI as a Policy Tool:

* Advantages: Holistic measurement (beyond income), granular data for targeted interventions, effective monitoring of schemes, guides resource allocation, fosters inter-sectoral convergence, aligns with SDGs (especially 1.2). * Examples: SBM for 'Sanitation', PMUY for 'Cooking Fuel', Ayushman Bharat for 'Health'. NITI Aayog 2023 report data (135 million lifted) as evidence.

1
Methodology & Critique:

* Alkire-Foster: Dual cutoff (1/3 weighted deprivations), Headcount Ratio (H), Intensity (A), MPI = H*A. * Dimensions/Indicators: 3 dimensions (Health, Education, Living Standards), 10 indicators (specific list). * Limitations: Data lag (NFHS periodicity), subjectivity in indicator/threshold selection, equal weighting may not reflect real priorities, doesn't capture intra-household disparities, doesn't directly measure income.

1
MPI vs. Other Measures:

* Income Poverty: MPI is multi-dimensional, identifies 'how' people are poor; income is unidimensional, identifies 'who' is poor. Both are complementary. * HDI: MPI focuses on poverty at individual/household level; HDI is an aggregate national development index. MPI offers disaggregated data for policy action; HDI for broad comparisons.

1
Linkages:

* SDGs: Direct link to SDG 1.2, strong connections to SDG 3, 4, 6, 7, 11. * Government Schemes: Direct impact of flagship schemes on specific MPI indicators, leading to overall MPI reduction. * Fiscal Federalism: MPI data highlights state disparities, influencing central-state resource allocation and policy coordination.

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Vyyuha Analysis: — Paradigm shift in poverty measurement, political economy of adoption, budgetary implications, tension between MPI gains and income inequality, crucial for 'Viksit Bharat' vision. Emphasize its role in evidence-based governance.

Vyyuha Quick Recall

Vyyuha's 3-10-2 MPI Framework:

3 Dimensions: — Health, Education, Living Standards (HEAL - easy to remember!)
10 Indicators: — (H: Nutrition, Child Mortality, Antenatal Care; E: Years of Schooling, School Attendance; L: Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets)
2 Cutoffs: — Deprivation cutoff (for each indicator) & Poverty cutoff (1/3 of weighted deprivations).

Memory Hooks:

1
NITI Aayog's NFHS Numbers: — NITI Aayog uses NFHS data. Remember 'N' for NITI, 'N' for NFHS.
2
MPI is H x A: — 'H' for Headcount, 'A' for Intensity. MPI is the 'HA' of poverty.
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1/3 Rule: — You're poor if you miss 1/3 of the weighted pie (deprivations).
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HEAL the Poor: — The 3 dimensions (Health, Education, Living Standards) are what we need to 'HEAL' in the poor.
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Living Standards - The '6 Senses': — Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets (think of these as basic 'senses' for a decent life).
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135 Million: — The magic number of people lifted out of poverty by NITI Aayog 2023 report.