Glaring omissions

In the recent interim budget speech, the finance minister highlighted that 25 crore people have come out of poverty in the last decade, measured through the new Multidimensional Poverty Index (MPI) developed by NITI Aayog. Yet, as a citizen (and a non-economist, I must add), the first question that comes to mind is what the MPI comprises that has resulted in this optimistic figure. While the object is not to negate positive statements and endeavors towards a more holistic measure of poverty, a research curiosity begs a further look at the composition of this index. This is especially important when winter has just passed in Delhi, which has seen its citizens gasping for breath in the national capital region due to pollution and smog. This is not to exclude the contaminated water in many parts of Delhi, often attributed, among others, to the ammonia level in the Yamuna.

As per the NITI Aayog report, we find that the MPI is a global measure launched by the UNDP in 2010 and internationally covers a range of indicators (not limited to traditional income measures) in the areas of health, education, standard of living (cooking fuel, sanitation, drinking water, electricity, housing, and assets). The World Bank defines MPI as a measure “which seeks to understand poverty beyond monetary deprivations (which remain the focal point of the World Bank’s monitoring of global poverty) by including access to education and basic infrastructure along with the monetary headcount ratio at the USD 2.15 international poverty line”.

India introduced the MPI in 2021 and recomputed poverty estimates per this index. The MPI was also developed with the 2030 Sustainable Development Goals (SDGs) set by the United Nations (UN) for eradicating poverty. As per the global measure, India's MPI comprises three heads (health, nutrition, and standard of living) and has retained ten indicators from the global MPI index, with two additional indicators comprising maternal health and bank account.

However, the index has been criticised for many methodological deficiencies and the exclusion of relevant indicators. For instance, a recent article (see Ajit Kumar Sing, ‘Niti Aayog’s Multidimensional Index: Some methodological issues,’ Economic & Political Weekly, 2024) highlighted the indices have glaring omissions and shortcomings in selecting indicators (such as nutrition and bank accounts). The article also observed methodology weaknesses (such as mixing outputs and processes in the same measure, overreliance on urban estimates at the district level, and assigning equal weights to all components) while lacking rigor. Others (see Rattani & Ray, ‘Garibi Hatao as a numbers Game,’ Deccan Herald; February 13, 2024) have also voiced concerns about the methodology and data points.

A crucial omission in the MPI is the Right to clean air. India has recorded successive years of toxic air in the National Capital Region. Toxic air has far-reaching negative health consequences on citizens even before what nutrition can provide. Apart from increasing lung diseases and cancer risk, as per a recent Times of India report citing the observations of the Energy Policy Institute (Chicago University), the life span of citizens of Delhi is said to be shortened by 11.9 years due to air pollution. As per the report, Delhi and other states (Bihar, Chandigarh, Haryana, Punjab, UP, and West Bengal) face the greatest health burden due to particulate pollution in the country. By excluding the Right to breathe and clean air from the MDPI, policy focus is diminished on the fundamental rights of a human being.

Similarly, with clean water, the MPI terms it as a deprivation if “The household does not have access to safe or ‘improved sources’ of drinking water at least a 30-minute walk from home (as a round trip)”. While the index uses the term access to ‘improved’ water and measures it in terms of reach, one is left wondering what the definition of ‘improved’ is. Furthermore, even when there is access, urban India has issues with access to contaminated water for hygiene and drinking (even from taps), with equivalent hazardous consequences.

Turning to healthcare, the MPI covers only three indicators of health (nutrition, child-adolescent mortality, and maternal health). However, with its vast population, India ranks poorly in terms of access to healthcare. As pointed out in a recent book by Kumar V Pratap and Manshi Gupta, ‘Infrastructure Financing in India’, 45 per cent of India’s population has to travel over 100 km to access quality healthcare, which can lead to delays in essential treatment and low survival rates and the community’s standard of living. Further in the book, the authors highlight that India’s healthcare sector suffers from other vital deficiencies such as low bed density, high concentration of facilities in a few cities, and low healthcare spend relative to other nations (3.9 per cent of GDP compared to 9.9 per cent in different countries).

Sustainability and MPI are not distinct subjects, as demonstrated by including the standard of living and linking the development of the MPI as a necessary tool to achieve the 2030 Sustainability Development Agenda (which has one of the aims of reducing poverty across measures beyond income). However, while having an index linked to global standards facilitates performance tracking and comparison for SDG purposes, the same may not be representative of India’s poor across basic needs and essentials.

The poverty index needs to be broad-based. While sanitation and water have been included (although with limitations as discussed in this article), the right to breathe is paramount and must be included. Is not clean air an essential indicator of standard of living? Clean air is a basic need, but it is a deprivation. Until then, we are left with a confounded feeling that perhaps the bulk of us remain poor, deprived of necessities even if our per capita income is comfortable, leaving us with various health consequences and perhaps a diminished life span. Studies have also shown that pollution hurts the poorest section of society the most (see ‘The Health Risks of Household Air Pollution Are Strongly Correlated with Poverty,’ World Health Organisation).

While all indices (not only poverty-related) have some criticisms of methodology limitations, more omitted indicators, excluding a fundamental right and only including a few is a pick-and-choose approach. It would be then much better off not having a multidimensional index until it is made to cover at least the population's basic standard of living needs. The Supreme Court (SC) of India also recently linked climate change's adverse effects to citizens' fundamental rights. An inaccurate measure of poverty is perhaps a greater disservice to the poor, and providing no measure is better than delivering a faulty one.

Any multidimensional index must, therefore, comprehensively cover essential needs before moving on to other dimensions of poverty. No doubt poverty is multidimensional, but not having a bank account or a motorbike may not be the same as not having a lack of clean air or access to healthcare or quality drinking water. Until the methodology is rectified, there will be a stark difference between multidimensional poverty and actual poverty.

The author is presently a Visiting Fellow @ RIS (Delhi). He has worked for many years in the financial services sector. Views expressed are personal