Poverty & UNDP

Context: The UN report noted that deprivation in all indicators declined in India and “the poorest States and groups, including children and people in disadvantaged caste groups, had the fastest absolute progress.”

Different types of Poverty 

Absolute Poverty 

Absolute poverty means poverty defined using a universal baseline with no reference to other people’s income or access to goods. The failure of meeting this baseline thus means that the individual is poor.

It incorporates the deficiency of basic food, clean water, prosperity, refuge, guidance and information and puts a money value on them to calculate a baseline. 

Relative Poverty 

Relative poverty is the level of poverty which changes depending on the context–it’s relative to the economic context in which it exists. Relative poverty is present when a household income is lower than the median income in a particular country.

For example, if the disposable income of a household is less than 50% of the median income of the country the household is relatively poor.

Situational Poverty 

Situational poverty occurs when “a family temporarily experiences financial constraints due to an illness, job loss, or other temporary event”.

Generational Poverty 

Generational poverty is a condition in which poverty has become a familial pattern for at least two generations, although it typically affects multiple generations. Sometimes, situational poverty may lead to Generational poverty.

Subjective Poverty 

Subjective poverty is an individual’s perception on his or her financial/material situation. This kind of Poverty is defined on the basis of individual feeling, i.e., those who say that they feel poor represent subjective poverty.

Different Methods of measuring Poverty

Head Count Ratio or Poverty Ratio 

Absolute poverty may be measured by the number or ‘head count’ of those whose incomes fall below the ‘poverty line’. Head Count Ratio is the percentage of that population in the total population.  

Multi-dimensional Poverty 

Multidimensional poverty encompasses the many deprivations that people can experience across different areas of their lives. This could include a lack of education or employment, inadequate housing, poor health and nutrition, low personal security, or social isolation.

Multidimensional Poverty Index (MPI) is released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI). 

The MPI as a poverty index can be pictured as a stacked tower of the interlinked deprivations experienced by poor individuals, with the aim of eliminating these deprivations.

Source UNDP

Causes of improvement 

During the last two decades, India has implemented several social protection programmes with the aim to improve living standards, and these have helped the Indian government in poverty reduction.

• Implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) since 2006 has significantly increased household consumption and accumulated more nonfinancial assets.
• Minimum Support Price (MSP), Public Distribution Systems (PDS), PM-POSHAN and other programmes have addressed the problem of food security. 
• Code on social security, Code on wages etc. have increased labour earnings and security of job which played significant roles in poverty reduction.
• PM- Jan Dhan Yojana and biometric identity cards under Aadhar have also transformed the anti-poverty programmes by replacing the current cumbersome and leaky distribution of benefits under various schemes using the Direct Benefit Transfers (DBT) programme. 
• Saubhagya scheme, PM-Sahaj Har Ghar Bijali Yojana etc. helped in improving the standard of living.
• Swachh Bharat mission, National Rural Drinking Water Programme, Total Sanitation Campaign, Jalmani Programme etc. have helped in improving the sanitation outcomes.

Current status of MPI in India

India was among the 19 countries that halved their global Multidimensional Poverty Index (MPI) value during one period – for India it was 2005/2006–2015/2016.

• According to the report, people who are multidimensionally poor and deprived under the nutrition indicator in India declined from 44.3% in 2005/2006 to 11.8% in 2019/2021, Child mortality fell from 4.5% to 1.5%.
• Those who are poor and deprived of cooking fuel fell from 52.9% to 13.9% and those deprived of sanitation fell from 50.4% in 2005/2006 to 11.3% in 2019/2021.
• In the drinking water indicator, the percentage of people who are multidimensionally poor and deprived fell from 16.4 to 2.7 during the period, electricity (from 29% to 2.1%) and housing from 44.9% to 13.6%.

Way Forward

• Government may focus on the implementation of programmes which faces the problem of rigidity, non-adaptability to local conditions, late disbursement of funds, reallocation of funds to unrelated recurring expenditure, and wide-ranging rent-seeking practices. 
• DBT, technological improvement Programmes and sanitation programmes has been criticised because of digital divide and urban biasness in their implementation. Through initiatives for education and awareness, the Indian government could enhance the implementation its policies.