Reflections on the NITI Aayog Multidimensional Poverty Index

In November 2021, the NITI Aayog ­released the Multidimensional Poverty Index (MPI) for India, states and districts (NITI Aayog 2021), which is also seen as a baseline report on the MPI. The MPIs are estimated with a focus on the Sustainable Development Goal monitoring indicator (SDG 1.2), one of the 29 indices for monitoring reform and growth, identified by the Government of India. The baseline report has been prepared by the NITI Aayog in consultation with the Oxford Poverty and Human Development Initiative (OPHI) and UNDP. Similar estimates were also produced by the OPHI using the same data set three years back, soon after the release of the National Family Health Survey (NFHS-4) unit data, 2015–16 (Alkire et al 2020). With the release of national MPI report by the NITI Aayog, the MPIs have now been integrated in the official statistical system. While the inclusion of multidimensional poverty in national planning and policy is a positive development, this exercise does not overcome the limitations of the earlier estimates in its current version. This article presents some reflections and shortcomings of the global as well as ­India’s MPIs.

The concept of multidimensional poverty that evolved in the human development paradigm is appealing because of its ability to accommodate both monetary and non-monetary aspects of poverty and the measuring of multiple and overlapping deprivations at the same time. During the last one-decade (since 2010), the OPHI has been generating estimates of MPIs for over 109 developing countries, using the Alkire–Foster method and these estimates are being disseminated by the global Human Development Report (HDR). The MPIs are being estimated by accounting for three key aspects of human development: health, education and standard of living of the population represented through a set of 10 (ten) indicators largely from Dem­ographic Health Survey (DHS) data sets and other nationally representative surveys conducted by countries. The Alkire–Foster methodology provides three indices, namely percentage of multidimensional poor persons (H), intensity of poverty (a), and MPI, a composite index based on H and a. While H is the headcount ratio (ratio of multidimensional poor to total population), a is the average of weighted score on indicators the poor are deprived of and the MPI is the proportion of weighted deprivation that the poor experience in a society out of all total potential deprivation in the society (product of H and a). The dimensions, indicators, methodology and data source used in global MPI as used in HDR 2020 are being replicated in the Indian case, with minor change in two indicators (UNDP 2020; NITI Aayog 2021).