Multidimensional Poverty in India

If government sources — and the World Bank — are to be believed, poverty in India has declined significantly in the past two decades.  Even as newer assessments of income poverty emerge (as with the Report of the Tendulkar Committee on Poverty Estimates) that raise the proportion of people below the poverty line, it is still argued that this proportion may be higher than earlier thought, but has still come down a lot during the period of high economic growth.

Of course there are many criticisms of this approach to measuring income poverty, including the argument that it has moved very far away from the original focus on minimum calorie intake that earlier served as the basis for the definition of the poverty line.  But there may be other serious criticisms that question the definition of poverty based on a very limited notion of money incomes and expenditure.

To some people, this may seem a bit of a strange criticism.  Isn’t the link between poverty and lack of income or assets so obvious as to preclude any debate?  Obviously, the poor are those who do not have income or assets, so what’s the point of querying that?  The answer is that a single-minded focus on income poverty may actually detract from policies that are designed to reduce poverty, and may even miss out one of the aspects that make poor people most vulnerable.

It is increasingly being realised that poverty is much more than a lack of adequate income: it is most fundamentally the deprivation of a person’s ability to live as a free and dignified human being, with the full potential to achieve her or his goals in life.

The UN World Summit for Social Development of 2006 described poverty as follows: “Poverty has various manifestations, including lack of income and productive resources sufficient to ensure sustainable livelihoods; hunger and malnutrition; ill-health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments; and social discrimination and exclusion.  It is also characterized by a lack of participation in decision-making and in civil, social and cultural life.”

This approach is not dissociated from income and economic growth, especially since livelihood and income from employment play such important roles in determining whether a person or household is poor.  But it does highlight three important elements of poverty that can be lost in a purely income-based approach: restrictions in opportunities, vulnerability to shocks and social exclusion.

This is why recently there have been efforts to develop broader concepts of poverty that recognise its multidimensional nature and allow for interventions that address different dimensions of poverty.  The “human poverty” approach developed by Amartya Sen and Sudhir Anand talked about poverty as the absence of some basic capabilities to function, and thus brought in health and education indicators along with material standards of living.

More recently, UNICEF introduced a multidimensional approach to child poverty, which identified seven dimensions in which children can be deprived: shelter, sanitation, safe drinking water, information, food, education and health.  Threshold levels were defined for each dimension, and children who were seen to be deficient in two or more were poor while those deficient in four or more were extremely deprived.

This generated some startling information on the extent of child poverty, with much greater incidence of child poverty in most developing countries than emerges from a simple reliance on income poverty lines.

Building on such work, the Oxford Poverty & Human Development Initiative (OPHI) and UNDP have worked out a Multidimensional Poverty Index.  This index is based on a range of deprivations at the household level, from education to health outcomes to assets and services.  Education indicators include years of schooling and child enrolment; health indicators used are child mortality and nutrition; standard of living indicators include electricity and drinking water access, sanitation, flooring, cooking fuel and certain basic physical assets.

A person is defined as poor if she or he is deficient in at least 30 per cent of the weighted indicators.  It is true that there are difficulties in getting adequate data to provide an accurate measure.  To be a good measure of poverty or deprivation, the dataset must refer to the same set of households.  It cannot be assumed that the different indicators overlap.  However, consumer expenditure or income surveys on which income data are based do not provide data on the other indicators, which must be taken from several different sources.

Even with these limitations, the MPI provides quite different estimates of poverty.  In India, the proportion of poor in MPI terms comes to 55 per cent, compared to around 30 per cent on the basis of the official poverty line and 42 per cent using the World Bank’s $1.25 per day measure.

What may be even more significant from a policy point of view is the information the MPI provides on the most extensive deprivations.  The most widespread deprivations are in cooking fuel (52 per cent), sanitation (49 per cent), nutrition (39 per cent) and quality of flooring (40 per cent).  In rural India, nutrition, child mortality and education indicators are the greatest contributors to the overall deprivation.

For a government that is genuinely concerned with improving the lot of its citizens, this can constitute extremely important information to focus its policy interventions.  But then maybe the citizenry also has to become more vocal in demanding such attention from the government.

Jayati Ghosh is Professor, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, and Executive Secretary of International Development Economics Associates (IDEAs).  This article was first published by MacroScan on 30 August 2010; it is reproduced here for non-profit educational purposes.

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