Multidimensional Poverty Index: How the UT of J&K fared in the last five years
As the data informs policy, govt must address the serious issues pertaining to timely availability and quality of the data to ensure effective and policy interventions
By: Suhail Ah Khoja, Nighat Nasir
NITI Aayog, the apex public policy think tank of the Government of India, recently released its latest and second report on multidimensional poverty titled “National Multidimensional Poverty: A Progress Review 2023”. The report claims that about 13.5 crore people in India exited multidimensional poverty between 2015-16 and 2019-21, with a steep decline in poverty headcount ratio (Percentage of the total population who are multidimensionally poor in the country) from 24.85% to 14.96% over the same period.
It further highlights that the fastest decline in the percentage of multidimensional poor has been registered in the rural areas from 32.59% to 19.28 between 2015-16 and 2019-21. It also claims that the incidence of poverty reduced in urban areas from 8.65% to 5.27% between 2015-16 and 2019-21. The report further claims that rural poverty fell primarily due to decrease in the number of multidimensionally poor in States such as UP, Bihar, MP, Odisha and Rajasthan recorded steepest decline in number of MPI poor. Bihar, Jharkhand, Meghalaya, Uttar Pradesh top the list of States in multidimensional poverty. In this column we have attempted to analyze how the Union territory (UT) of J&K has fared in the National Multidimensional Poverty Index in the last 5 years.
Global Multidimensional Poverty Index
The global Multidimensional Poverty Index (MPI) was developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP). It replaced the previous Human Poverty Index (1997) and is the most widely used non-monetary poverty Index in the Word. It estimates acute multidimensional poverty across more than 100 developing countries by constructing a deprivation profile for each household and person in it that tracks deprivations in 10 indicators spanning health, education and standard of living. Global MPI has 3 dimensions and 10 indicators: 1.Health (Child Mortality, Nutrition), 2. Education (Years of Schooling, School attendance), 3.Living standards (Cooking Fuel, Toilet, Drinking Water, Electricity, Housing, Assets). All indicators are equally weighted within each dimension, so the health and education indicators are weighted 1/6 each, and the standard of living indicators are weighted 1/18 each. The MPI is based on The Alkire-Foster methodology, which is an extension of the widely accepted Foster-Greer-Thorbecke (FGT) class of poverty measures that use the dual cutoff method and has a range of technical and practical advantages that make it favorable for use in non-monetary poverty estimation.
How National MPI differs from Global MPI
The national MPI model retains the ten indicators of the global MPI model, staying closely aligned to the global methodology. It also adds two indicators, one to Health dimension (Maternal Health) and another one to Standard of living dimension (Bank Accounts) in line with national priorities.
All indicators are equally weighted within each dimension except Health in which Nutrition is weighted 1/6 and, Child & Adolescent Mortality, Maternal health are weighted 1/12 each, education indicators are weighted 1/6 each and the standard of living indicators are weighted 1/21 each. It provides multidimensional poverty estimates for India’s 36 States & Union Territories, along with 707 administrative districts across 12 indicators of the national MPI.
These estimates have been computed using data from the 5th round of the NFHS (NFHS-5) conducted in 2019-21, employing the same methodology as the baseline report. NITI Aayog, is the nodal agency for MPI, and has been responsible for constructing an indigenized index for monitoring the performance of States and Union Territories in addressing multidimensional poverty in with the aid of inter-ministerial MPI coordination Committee, experts from MoSPI and technical partners-UNDP & OPHI
Why MPI was required
The rationale behind the index is that the conventional approach to measuring poverty is to specify a minimum expenditure (or income) required to purchase a basket of goods and services necessary to satisfy basic human needs. This expenditure is called the poverty line, for example, as per the Task Force on “Projections of Minimum Needs and Effective Consumption Demand” led by Dr. Y. K. Alagh in 1979, Poverty line was defined as the per capita consumption expenditure level to meet average per capita daily calorie requirement of 2400 kcal per capita per day in rural areas and 2100 kcal per capita per day in urban areas at 1973-74 prices. Simple headcount ratios or poverty rates do not provide any insights on the depth of poverty.
It is possible that while the number of poor individuals as captured by the headcount ratio reduce, the poorest may, in fact, get even poorer. MPI aims at understanding, measuring, and addressing the many dimensions of poverty and leveraging this understanding as a key tool in policymaking.
What the report says on UT of J&K
As per the latest report, the UT of J&K has witnessed a significant improvement in multidimensional poverty with the headcount ratio falling from 12.56% to 4.80% between 2015-16 and 2019-21. Pertinently, the headcount ratio fell from 16.37% to 6.10% in rural areas of the union territory, while in case of urban areas it fell from 3.51% to 1.09% between 2015-16 and 2019-21. In J&K the headcount index fell by almost 8 percentage points over the same period, which is third highest among the 8 UTs after Dadra & Nagar Haveli & Daman & Diu (10.38), Ladakh (9.17).
Moreover, among the UTs of India, the UT of J&K has the highest number of people in multidimensional poverty, mostly because of its relatively huge population among the same cohort of UTs, figuring at around 10, 44,860 which is 0.98% of its total population, as per the estimate of population projection for India and states/UT for the year 2021 by ministry of health and family welfare (MoHFW). Among the 20 districts of the UT of J&K, Ramban has the highest percentage of population in multidimensional poverty at 14.86 and it is lowest in Jammu district at 0.49%. As per the latest report, the headcount ratio for various districts of the UT are as: Ramban (14.86%), Reasi (11.40%), Kishtwar (10.59%), Udhampur(10.23%), Rajouri(8.07%), Doda(7.71%), Baramulla (6.68%), Poonch, (6.65%), Bandipora (5.36%), Budgam (5.20%), Kupwara(4.97%), Kulgam(3.97%), Ganderbal (3.46%), Anantnag (3.07%), Kathua (2.70%), Samba (2.30%), Pulwama(2.09%), Shopian (1.54%), Srinagar (1.34%), Jammu (0.49%). Interestingly, all the 20 districts of the UT witnessed an overall decrease in the headcount ratio, however Doda has witnessed a highest fall in the headcount index by 21 percentage points between 2015-16 and 2019-21, followed by Ramban where it fell by 20.40 percentage points, while in Kupwara it fell by 11.11 percentage points.
What contributed to fall in MPI in J&K?
In the UT of J&K, all the 12 indicators across the three dimensions – Health, Education and Standard of living – saw statistically significant reduction across the two time periods. Particularly, deprivations in sanitation (reduction by 21.93 % points), cooking fuel (reduction by 13.15% points), nutrition (reduction by 10 % points) and Assets (reduction by 8.21% points) fell the most during the period from 2015-16 to 2019-21. Overall, progress in nutrition, sanitation, and cooking fuel has been the significant contributor to the decline in MPI value though there is further scope to make improvements.
As per the latest report, the MPI value in the UT fell from 0.055 to 0.020 between 2015-16 and 2019-21. Though the percentage contribution of other indicators to MPI value in 2019-21 fell, however, it increased in Years of schooling ( from 13.45% to 17.85%), school attendance (from 7.55% to 10.93%) and marginally in case of drinking water and housing. Such stellar progress of the UT can be attributed to the govt’s commitment to improve the quality of people’s lives through targeted policies by investment on critical sectors like education, health sanitation and other sectors through various schemes like Swachch Bharat Mission (SBM), Jal Jeevan Mission (JJM), Poshan Abhiyan, Samagra Shiksha, Pradhan Mantri Sahaj Bijli ,Har Ghar Yojana (Saubhagya), Pradhan Mantri Ujjwala Yojana (PMUY), Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Awas Yojana (PMAY).
Way forward
The latest report clearly reflects the progress that the entire country and the UT of J&K have achieved between 2015-16 and 2019-21, however these finds must be interpreted with caution and consideration to the context, as the poverty estimates presented in this report may not fully assess the effects of the COVID-19 pandemic on poverty, since more than 70% of the data (NFHS-5) was collected before the pandemic. At the same time, this report does not capture the economic and social progress the country has made in the last two years. Moreover, in India, concerns relating to the timely availability of data and its quality have consistently been raised by various policymakers.
As the data informs policy, the sampling framework used to collect data for various sample surveys like NFHS should be assessed to ensure the representativeness of the sample surveys, a concern recently raised by Dr. Shamika Ravi that positively culminated in setting up of a panel to review conduct of surveys, chaired by former Chief Statistician Dr Pronab Sen. Moreover, govt must increase its investment from current levels in the critical sectors like education, sanitation, housing and others to achieve progress on target 1.2 of the SDGs which aims at reducing “at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions.”
The writers are Post graduate students of Economics at University of Kashmir. [email protected], [email protected]
