A Special project report on

“Multidimensional poverty in India”

Project submitted to:
Prof. Hanumant Yadav
(Faculty of Economics)

Project submitted by:

Pankaj Sharma
Semester III, Roll No. 100
Section A
18.10.2016

HIDAYATULLAH NATIONAL LAW

UNIVERSITY
RAIPUR, c.g.
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 TABLE OF CONTENTS

 Acknowledgement……………………………………………….…3
 Introduction………………………………………………………….4-5
 Objectives……………………………………………………………...6
 Research Methodology

 Collection of data…………………………………………….6
 ………………………………………………………..7-8
 I9-10
 …………………………………..11-13
 14-16
 ………………………………………………………………..17-18
 Conclusion……………………………………………………………….19
 References………………………………………………………………20

ACKNOWLEDGEMENT
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I feel highly elated to work on the topic “Multidimensional Poverty in India” because it has
significant importance in the current scenario.

I express my deepest regard and gratitude for our Faculty of Economics. Their consistent
supervision, constant inspiration and invaluable guidance have been of immense help in
understanding and carrying out the importance of the project report.

I would like to thank my family and friends without whose support and encouragement, this
project would not have been a reality.

I take this opportunity to also thank the University and the Vice Chancellor for providing
extensive database resources in the Library and through Internet.

Pankaj Sharma

Semester – III

Roll No. - 100

INTRODUCTION

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Poverty has traditionally been measured in one dimension, usually income or consumption
(terms used interchangeably here). In this analysis, a basket of goods and services
considered the minimum requirement to live a non-impoverished life is valued at the
current prices. People who do not have an income sufficient to cover that basket are
deemed poor. Income poverty certainly provides very useful information. Yet poor
people themselves define their poverty much more broadly to include lack of
education, health, housing, empowerment, employment, personal security and more.
No one indicator, such as income, is uniquely able to capture the multiple aspects
that contribute to poverty (section 7 discusses income and multidimensional poverty
in detail). For this reason, since 1997, Human Development Reports (HDRs) have
measured poverty in ways different than traditional income-based measures. The
Human Poverty Index (HPI) was the first such measure, which was replaced by the
Multidimensional Poverty Index (MPI) in 2010 (section 8 elaborates on the
differences between the two). The MPI is an index designed to measure acute
poverty. Acute poverty refers to two main characteristics. First, it includes people
living under conditions where they do not reach the minimum internationally agreed
standards in indicators of basic functionings, 2 such as being well nourished, being
educated or drinking clean water. Second, it refers to people living under conditions
where they do not reach the minimum standards in several aspects at the same time.
In other words, the MPI measures those experiencing multiple deprivations, people
who, for example, are both undernourished and do not have clean drinking water,
adequate sanitation or clean fuel.

OBJECTIVES
 To study about the multidimensional poverty in India
 To study about the multidimensional poverty index.

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 RESEARCH METHODOLOGY
This project report is based on Descriptive Research Methodology.

COLLECTION OF DATA:

Secondary and Electronic resources have been largely used to gather information and data
about the topic.

Books and other reference as guided by Faculty have been primarily helpful in giving this
project a firm structure. Websites, dictionaries and articles have also been referred. Footnotes
have been provided wherever needed, either to acknowledge the source or to point to a
particular provision of law.

Multidimensional Poverty Index

The Global Multidimensional Poverty Index (MPI for short) is an international measure of
acute poverty covering more than 100 developing countries. The MPI complements income-
based poverty measures by reflecting the multiple deprivations that people face at the same
time. The MPI identifies deprivations across health, education and living standards, and
shows the number of people who are multidimensionally poor and the deprivations that they
face at the household level.
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The MPI has ten indicators: two for health, two for education and six for living standards.
The indicators of the MPI were selected after a thorough consultation process involving
experts in all three dimensions. During this process, the ideal choices of indicators had to be
reconciled with what was actually possible in terms of data availability and cross-country
comparison. The ten indicators finally selected are almost the only set of indicators that could
be used to compare around 100 countries (section 8 explores these data limitations further).
Ideally, the MPI would be able to make comparisons across gender and age groups, for
example, along with documentation of intra-household inequalities. Yet because certain
variables are not observed for all household members this was not possible. So each person is
identified as deprived or not deprived using any available information for household
members. For example, if any household member for whom data exists is malnourished, each
person in that household is considered deprived in nutrition. Taking this approach – which
was required by the data – does not reveal intra-household disparities, but it is intuitive and
assumes shared positive (or negative) effects of achieving (or not achieving) certain
outcomes.

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 Multidimensional Poverty Index of India

The new international Multi-dimensional Poverty Index (MPI) has published in its report that
645 million people or 55% of India's population is poor. India's inability to ensure basic
levels of nutrition is the greatest contributor to its poverty. The new measure says
that that acute poverty prevails in eight Indian states, including Bihar, Uttar Pradesh
and West Bengal, together accounting for more poor people than in the 26 poorest
African nations combined.

The MPI has been developed by the Oxford Poverty and Human Development Initiative
(OPHI) for the United Nations Development Programme’s (UNDP) forthcoming 2010
Human Development Report. It is composed of ten indicators measuring health,
education and standard of living. The indicators used are:

· Education: Years of schooling and child enrollment (1/6 weightage each);

· Health: Child mortality and nutrition (1/6 weightage each);

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· Standard of living: Electricity, flooring, drinking water, sanitation, cooking fuel and
assets (1/18 weightage each)

An analysis by the MPI analysis has concluded that there are more ‘MPI poor’ people in eight
Indian states (421 million in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa,
Rajasthan, Uttar Pradesh, and West Bengal) than in the 26 poorest African countries
combined (410 million). The MPI takes into account a range of critical factors or
‘deprivations’ at the household level: from education to health outcomes to assets and
services. UNDP and OPHI claim that the new measure provides a fuller portrait of
acute poverty than simple income measures.

The report states that even the most prosperous states have more than 40% of their population
as poor by the new composite measure. Kerala is the only state in which the poor
constitute less than 20%. The MPI measures not only the incidence of poverty but its
intensity also. It defines a person as poor if he or she is deprived on at least 3 of the 10
indicators. By this definition, 55% of India is poor; almost double the official poverty
figure of 29%.

Almost 20% of Indians are deprived on 6 of the 10 indicators. 40% of those who are defined
as poor are also nutritionally deprived. Thus nutritional deprivation comes out as the
largest factor in estimating poverty. Multi-dimensional poverty is highest (81.4% poor)
among Scheduled Tribes, followed by Scheduled Castes (65.8%), Other Backward
Class (58.3%) and the general population (33.3%).

The MPI data differs significantly from the Planning Commissions official data. As per
the reportBihar becomes the poorest state in the country with 81.4% of its population as
poor. UP comes next with around 70% poor population. But as per the Planning
Commission's data, 41.4% of Bihar and 32.8% of UP is poor. Again MPI projects 60%
of north-east India and 50% of Jammu & Kashmir as poor while the official data are
16% and 5% respectively.

The new measure is expected to help target development resources more effectively. The
2010 UNDP Human Development Report will be published in late October, but
research findings from the Multidimensional Poverty Index were made available on

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 14th July 2010 at a policy forum in London and online on the websites of OPHI and the
UNDP Human Development Report. The Human Poverty Index, which has been a part
of the annual Human Development Report since 1997, will be replaced by MPI.

Multidimensional Poverty at Sub National Level

In addition to providing data on multidimensional poverty at the national level, the MPI can
also be broken down by sub-national regions to show disparities in poverty within countries.
This analysis can be easily performed when the survey used for the MPI is representative at
the sub-national level. The following table shows the MPI value and its two components at
the sub-national level: the incidence of poverty (H) and the average intensity of deprivation
across the poor (A). The fifth and sixth columns present the percentage of the population

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Vulnerable to Poverty and living in Severe Poverty, respectively (see page 1). The seventh
column presents the percentage of the population identified as Destitute, or deprived
according to more extreme indicators (see details at the back of this briefing). The second-to-
last column presents the level of inequality among the poor, calculated using a decomposable
inequality measure (see page 10). The last column presents the population share of each
region, which has been obtained by using the sampling weight in the respective survey
dataset, applied to the final sample used for the computation of the reported poverty statistics
in this country profile. The population-weighted regional figures on MPI, headcount ratio
(H), and intensity (A), sum to the national figures on MPI, H and A.

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 CONCLUSION
The global poverty line does not currently take the multiple dimensions of poverty into

account. There are many non-monetary indicators — on education, health, sanitation, water,

electricity, etc. — that are extremely important for understanding the many dimensions of

poverty that people experience.

The 2015 Multidimensional Poverty Index (MPI) counts 1.6 billion people as multi-

dimensionally poor, with the largest global share in South Asia and the highest intensity in

Sub-Saharan Africa.

These multiple indicators are an important complement to monetary measures of poverty and

are crucial to effectively improving the lives of the poorest, the report notes. However, the

recently-established Commission on Global Poverty is currently assessing how we measure

and understand poverty and how to improve this going forward. According to a WB

spokesperson, the CGP recommendations are expected in April 2016.

India poverty figures varies with method

Though home to the largest number of poor in 2012, India's poverty rate is one of the lowest

among those countries with the largest number of poor, the latest World Bank report notes.

Also in the case of India, with large numbers of people clustered close to the poverty line,

poverty estimates are significantly different depending on the recall period in the survey, the

authors note.

Since 2015 is the target year for the Millennium Development Goals, the assessment of

changes in poverty over time is best based on the Uniform Reference Period (URP)

consumption method, which uses a 30-day recall period for calculating consumption

expenditures, as per the report. This method, used to set the baseline poverty rates for India in

1990, shows India’s poverty rate for 2011/12 to be 21.2 per cent.

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By comparison, the Modified Mixed Reference Period (MMRP), which contains a shorter,

seven-day recall period for some food items leads to higher estimates of consumption and

therefore lower poverty estimates.

REFERENCES

 WWW.ECONOMICSHELP.COM

 http://www.indiastudychannel.com/resources/128692-Importance-industries-Indian-

economy.aspx

 http://business.mapsofindia.com/india-industry/

 http://www.rsmm.com/

 http://www.riico.co.in/mineral.htm

 Directorate of Economics & Statistics.htm

 http://rajasthan.gov.in

 http://business.mapsofindia.com/india-industry/#sthash.pKZDBvF7.dpuf

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