The incidence of poverty in India is a matter of key concern for policy analysts and academic researchers both because of its scope and intensity. National poverty line estimates indicated a poverty incidence of 27.5% in 2004-2005, implying that over one quarter of the population in India lives below the poverty line. Also, in absolute numbers, India still has 301.7 million poor persons with a significant percentage of them being substantially or severely poor in terms of the norms identified as being necessary for survival.
If one considers the international poverty line of $1 per day (measured at 1993 purchasing power parity exchange rates), then the percentage of poor people in India is even higher, at around 34%. This percentage is pushed up to an alarming level of 80% if one uses the $2 per day as a poverty threshold.
Nearly 34% of India’s population lives on less than 100 rupees ($1.2) a day, according to the latest household consumption expenditure survey. Further, 47.3% of Indians manage with less than 200 rupees ($2.4) daily. Combined, these figures account for 81.1% of the population living under this threshold.
Conversely, a mere 0.2% of the population spends over 1,000 rupees ($12) daily, reflecting the vast disparities in income distribution, according to an analysis by Ishan Anand, an economics professor at IIT Delhi, published in The India Forum journal.
According to the survey, the average monthly per capita consumer expenditure for the bottom 50% is just 2,621 rupees. In contrast, the top 1% spends around 25,000 rupees ($300) per month per capita, a figure that likely underestimates their actual consumption.
Source : News Reel
India has revealed that nearly 250 million people have been lifted out of multidimensional poverty. However, experts have raised doubts about the lack of relevant data.
On paper, India has much to celebrate. Around 248 million people living in the country escaped multidimensional poverty in the past nine years, according to a report by NITI Aayog, a government think tank.
The report suggests an 18% decline in multidimensional poverty over the last nine years, with the share of people living in this condition declining from 29% to 11%.
The numbers would appear to show strong progress towards the government’s goal of reducing multidimensional poverty to below 1%, but some economists have raised some serious doubts over the use of the Multidimensional Poverty Index (MPI) to make these claims, pointing out that the report does not paint the full picture.
“The methodology is questionable,” said Santosh Mehrotra, a visiting professor of development economics at University of Bath’s Center for Development Studies.
Does the MPI accurately reflect poverty?
Multidimensional poverty is based on health, education and living standards, each of which is given equal weight. The three categories are divided into 12 indicators.
Every household in India is given a score based on the 12 parameters and if a household has a deprivation score higher than 33%, it is identified as multidimensionally poor.
The MPI, also called the Alkire-Foster method, was developed by the Oxford Poverty and Human Development Initiative to measure the levels and intensity of poverty.
India has added two new parameters — maternal health and bank accounts — to its national MPI.
Some economists have argued that the devastating impact of COVID on poverty is missing in the report’s findings — while others point out that the number and share of the population below the consumption poverty line, the traditional method of estimating poverty globally, is absent.
‘Lack of relevant data’
Mehrotra argues that the purpose of using the national MPI as the poverty indicator for India, despite an absence of consumption expenditure surveys between 2014 and 2022, is part of a political strategy.
“Real wages were stagnant for six years which had serious implications for consumption demands and this cannot be consistent with decline in poverty levels,” said Mehrotra.
“Does the methodology and its results hold up to closer examination? Has the MDI been able to capture the full picture?”
Lekha Chakraborty, professor and chair at the National Institute of Public Finance and Policy, pointed out that any composite index has limitations as it is highly skewed based on the specific choice of variables, as well as the methodology used.
“Even the Human Development Index (HDI) constructed by UN every year is not free from conceptual and methodological criticisms as it is based on only selected three indicators and the way weightage is given to each of the variables,” Chakraborty told DW.
In her reckoning, data constraints thwart the meaningful constructions of such composite indicators and economists always use “proxy variables” or “extrapolate” the data.
“Poverty is dynamic, like chasing a moving target — using MPI for the policy decisions will be highly controversial,” she added.
Controversies surrounding poverty estimates
The NITI Aayog report also claims that various government initiatives and welfare schemes have played a major role in mitigating different forms of deprivation.
Arun Kumar, a retired professor of economics from Delhi’s Jawaharlal Nehru University, told DW that the government’s report needs reinterpretation.
“There are lacunae. The health and education indicators which have the highest contribution to MPI were most adversely impacted in the pandemic year 2020–21,” Kumar told DW.
“Using data from the fifth National Family Health Survey of 2019-21 must have led to substantial errors in the deprivation index based on the survey, opening the conclusions of the NITI Aayog report to suspicion,” Kumar told DW, referring to a large-scale, multi-round survey conducted in a representative sample of households throughout India.
Controversies surrounding poverty estimates in India are not new and have been a subject of debate in the past as well over the estimation and methodologies employed.
Poverty numbers are important for assessing the economic progress of a country, and the government also needs these numbers to estimate the number of beneficiaries of schemes, such as the public distribution system for food, meant for poverty alleviation.
The World Bank defines the international poverty line at $2.15 (€1.97) per day in 2017 purchasing power parity (PPP). PPP is a measure of the price of specific goods in different countries and is used to compare the absolute purchasing power of the countries’ currencies.
In October last year, India ranked 111 out of a total of 125 countries in the Global Hunger Index (GHI) 2023, with its progress against hunger nearly halted since 2015, reflecting a global trend.
The GHI measures countries’ performance on four component indicators — undernourishment, child wasting, child stunting and child mortality.
The government, though, contested India’s performance, citing flawed methodology. In the index released, India has a score of 28.7, indicating a serious level of hunger.
Source : DW
India among five countries with largest number of people living in poverty: UN report
India is among the five countries globally with the largest number of people living in poverty, according to the UN report that said 1.1 billion people, over half of them minors, live in acute poverty worldwide.
The latest update of the global Multidimensional Poverty Index (MPI) was released on Thursday by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) based at the University of Oxford.
It said that 1.1 billion people live in acute poverty worldwide, with 40 per cent living in countries experiencing war, fragility and/or low peacefulness, according ..
India has 234 million people living in poverty, which is medium Human Development Index, placing the country among five globally with the largest number of people living in poverty.
“The other four countries are Pakistan (93 million), Ethiopia (86 million), Nigeria (74 million) and the Democratic Republic of the Congo (66 million), all low HDI,” it said.
Together, these five countries account for nearly half (48.1 per cent) of the 1.1 billion poor people,” it said.
The report added that a “staggering” 455 million of the world’s poor live in countries exposed to violent conflict, hindering and even reversing hard-won progress to reduce poverty.
“Conflicts have intensified and multiplied in recent years, reaching new highs in casualties, displacing record millions of people, and causing widespread disruption to lives and livelihoods,” said Achim Steiner, UNDP Administrator.
“Our new research shows that of the 1.1 billion people living in multidimensional poverty, almost half a billion live in countries exposed to violent conflict.
“We must accelerate action to support them. We need resources and access for specialized development and early recovery interventions to help break the cycle of poverty and crisis.”
The report notes that over half of the 1.1 billion poor people are children under the age of 18 (584 million). Globally, 27.9 per cent of children live in poverty, compared with 13.5 per cent of adults.
Large proportions of the 1.1 billion poor people lack adequate sanitation (828 million), housing (886 million) or cooking fuel (998 million). Well over half of the 1.1 billion poor people live with a person who is undernourished in their household (637 million).
In South Asia 272 million poor people live in households with at least one undernourished person, and in Sub- Saharan Africa 256 million do, it said.
About 83.7 per cent of poor people live in rural areas. Across all world regions people in rural areas are poorer than people in urban areas. Overall, 28.0 per cent of the global rural population are poor, compared with 6.6 per cent of the urban population.
Of the 1.1 billion poor people, 218 million (19.0 per cent) live in war-affected countries. Nearly 40 per cent of poor people (455 million) live in countries experiencing war, fragility and/or low peacefulness, according to at least one of three widely used definitions, the report said.
While national rates vary, overall, in countries affected by war, the incidence of poverty is 34.8 per cent, much higher than the 10.9 per cent in countries not affected by war or minor conflicts.
Source : Economic Times
Source : Sapa
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