Poverty & Developmental Issues: Concepts and measurement

What is poverty?

Poverty is not only low income. Income (or consumption) poverty asks whether a household can buy a minimum basket of goods; multidimensional poverty asks whether people are deprived at the same time in health, education and living standards. Absolute poverty is falling below a fixed line; relative poverty is being far below the average of one’s society.

Mains 2016: “An essential condition to eradicate poverty is to liberate the poor from the process of deprivation. Mains 2016 ” Deprivation is a cycle: poor nutrition and health lower learning and earning, low earnings keep children out of good schools, and debt and lack of assets trap the next generation. Examples of breaking it: midday meals and anganwadis (nutrition), school enrolment, Jan Dhan accounts (finance), housing and toilets, and self-help groups for women.

Mains 2018: ‘Despite implementation of various programmes for eradication of poverty by the government in India, poverty is still existing. Mains 2018 ’ Reasons: leakages and poor targeting, low-productivity farm jobs, informal work with no social security, health shocks pushing families into debt, low female work participation, regional and social exclusion, and slow job creation in manufacturing.

Prelims 2012 asked how does the National Rural Livelihood Mission seek to improve livelihood options of rural poor? Prelims 2012 Answer (b): by strengthening ‘self-help groups’ and providing skill development (only statement 2), not by free inputs or building factories.

Measuring poverty: lines and the MPI

Poverty lines. Prelims 2019 asked why in a given year in India, official poverty lines are higher in some States than in others. Answer (b): price levels vary from State to State, so the same basket costs more in some States.

The MPI. Prelims 2012 asked what the Multi-dimensional Poverty Index developed by Oxford Poverty and Human Development Initiative with UNDP support covers. Answer (a): only deprivation of education, health, assets and services at household level, not national figures like PPP or deficits.

India’s National MPI (NITI Aayog) measures simultaneous deprivations across the three equally weighted dimensions of health, education, and standard of living, represented by 12 SDG-aligned indicators: nutrition, child and adolescent mortality, maternal health, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets, and bank accounts (PIB, 17 Jul 2023). Prelims 2026 asked candidates to consider statements about Multidimensional Poverty Index (MPI): it uses the Alkire-Foster methodology and NITI Aayog’s MPI has twelve indicators (answer a: 1 and 2 only; maternal health and bank account are India’s additions, not in the UNDP global MPI).

Sources: NITI Aayog National MPI Progress Review 2023 (PIB, 17 Jul 2023) and discussion paper (PIB, 15 Jan 2024).

Hunger is measured differently. Prelims 2016 asked which indicators IFPRI used to compute the Global Hunger Index Report: undernourishment, child stunting and child mortality (answer c: all three).