Poverty

Context: Thali Index shows real hunger, urging a shift from calorie-based to practical, food-based poverty measures in India.

Relevance of the Topic: Prelims: Poverty estimates in India.  Mains: Issues with current poverty estimates.

Poverty Estimates in India

• Officially approved poverty measurement in India has involved estimating the level of consumption expenditure sufficient to enable the minimum calorie intake necessary for living and working. If a person could afford food that gave them a certain number of calories (2400 cal in rural areas, 2100 cal in urban areas), they are not considered poor. 
• Committees like Tendulkar and Rangarajan suggested updates, but India has not revised its official poverty line since 2011-12. 
• This calorie-focused approach does not match how people actually live today. It ignores how expensive health, transport, and education have become.

Thali Index - A new approach:  

• A “thali” is a traditional Indian meal with rice or roti, dal, and vegetables. Indians recognise the thali as a fairly complete and nutritionally balanced unit of food consumption. 
• CRISIL estimated that in 2023-24, the cost of one such home-cooked thali was around ₹30. The researchers found that: 40% of rural Indians and 10% of urban Indians could not afford two thalis a day.
• This paints a very different picture than the reports from SBI or the World Bank.
  • SBI reported a remarkable decline in rural poverty, estimated at 4.86% in FY24 and urban poverty estimated at 4.09%.
  • The World Bank’s report pegged “extreme poverty” at 2.8% for rural India and 1.1% for urban India in 2022-23.

Why does this gap exist?

• Most poverty estimates look at total consumption spending. But in real life, people must first pay for essential expenditures like housing, transport, health, education, etc. Expenditure on food ends up as the residual expenditure. 
• That is why measuring actual food spending, like how many thalis one can buy, gives a clearer picture of people’s living conditions.

Benefits of Thali Index: 

• Thali Index can help make welfare schemes like PDS or food subsidies more targeted.
• It pushes policymakers to consider real-life costs people face, not just abstract numbers.
• It throws light on hidden hunger and malnutrition.

Limitations of Thali index:  

• Thali prices vary between cities and villages, and across seasons.
• The Index focuses on food and may miss out on other aspects like schooling, sanitation, or shelter.

What can be done?

• Use the Thali Index along with other tools like the Multidimensional Poverty Index.
• Regularly update poverty measures to reflect current spending habits.
• Eliminating the food subsidy at the upper reaches of the distribution while enhancing it at the lower levels.

India has made significant gains in income-based poverty reduction, but food deprivation persists at large. It is time to move beyond calorie counts to more practical indicators like the Thali Index, which  focuses on real hunger and basic human needs.

Context: According to Niti Aayog, India’s multidimensional poverty rate has reduced to 11.28% in 2022-23 from 29.17% in 2013-14.

Findings of NITI Aayog:

• It estimated that around 24.82 crore people escaped multidimensional poverty in the last nine years.
• States like Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan recorded the sharpest decline in the number of people classified as poor.
• Indicators in the standard of living dimension showed highest levels of deprivation in 2005-06. For instance, 74.4 per cent of the population was deprived of cooking fuel in 2005-06, which fell to 43.9 per cent between 2019-21. 
• Similarly, 70.92 per cent of the population was deprived of adequate sanitation facilities in 2005-06, which reduced to 30.93 per cent between 2019-21.
• Bihar recorded a 53 per cent drop from 56.3 per cent share of MPI poor in 2013-14 to 26.59 per cent in 2022-23.

About Multidimensional 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.
• Applying a narrow definition of poverty and focusing on one dimension alone, such as income, fails to capture the true reality of people’s circumstances. In contrast, multidimensional poverty measurement offers a more holistic approach which better reflects peoples lived experiences.

About Multidimensional Poverty Index (MPI): 

• Global MPI:  Developed by Oxford Poverty & Human Development Initiative (OPHI) in collaboration with the UN Development Programme (UNDP), in its flagship Human Development Report since 2010 and is the most widely used non-monetary poverty index in the world. It captures overlapping deprivations in health, education and living standards.
• These dimensions are broken into ten indicators, including child mortality, nutrition, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, and assets.

• National MPI: Niti Aayog released its Multidimension Poverty Index in 2021 for the first time.
• India’s national MPI is a contribution towards measuring progress on target 1.2 of the SDGs which aims at reducing “at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions.

Government initiative to reduce poverty in all dimensions:

• Poshan Abhiyan: To reduce malnutrition and stunting in children, adolescent girls, and women. It focuses on promoting a healthy diet, proper nutrition, and addressing related health issues.
• Anemia Mukt Bharat: This initiative is part of the larger Poshan Abhiyan and focuses specifically on preventing and reducing the prevalence of anemia among women, children, and adolescents.
• Targeted Public Distribution System under the National Food Security Act: Covers 81.35 crore beneficiaries, providing food grains to rural and urban populations. 
• Pradhan Mantri Garib Kalyan Anna Yojana: Provide additional free food grains to the poor and vulnerable sections of society to alleviate the hardships faced due to the COVID-19 pandemic. 
• Ujjwala Yojana : To provide free LPG connections to women from below-poverty-line households.
• Saubhagya:  Providing electricity to rural and urban areas, aiming to enhance the quality of life and economic development.
• Swachh Bharat Mission: To achieve universal sanitation coverage and make India open-defecation free.
• Jal Jeevan Mission: To provide piped water supply to all rural households by 2024.
• Pradhan Mantri Jan Dhan Yojana: To provide access to banking services for all households.
• PM Awas Yojana: To facilitate access to affordable housing for the low and moderate-income residents of the country.

Significance of multidimensional poverty:

• It is qualitative measure of poverty and it used non-monetary metrics to measure poverty in the world by measuring overlapping deprivations in access to health, education and living standards. 
• Monetary measures of poverty based on poverty lines only give headcount ratios i.e., number of people who are poor. However, these measures fail to measure depth of poverty. It is possible that while the overall number of poor individuals reduce, while at the same time the poorest get poorer. Also, gains in quality of life may be completely missed unless the poor cross the poverty line or exit poverty. 
• Thus, MPI provides insights not just into the distribution of poverty within a country but also indicates contribution of each indicator to multidimensional poverty. 
• Using MPI, it has been possible to device schemes which target specific deprivations.
• Helps to create a comprehensive understanding of poverty by identifying who is poor and the manner in which they experience poverty.

Limitations with MPI: 

• It does not capture intra-household inequality or inequality among the poor.
• The multitude of indicators can be overwhelming and may result in ineffective implementation.
• Determining the relevance of dimensions and deciding how many should be considered or prioritized is also challenging.
• Poverty is a complex issue with numerous factors, making it challenging to address all aspects.
• Collecting data for multidimensional indicators can be extremely challenging and demanding, requiring additional efforts from the agency to achieve meaningful results.
• MPI data released by NITI Aayog based on the National Family Health Survey (NFHS), which raises the issues of reliability of poverty assessments and subsequent policy decisions. (no independent assessment by NITI Aayog).

Way forward:

• Integrating the Multidimensional Poverty Index (MPI) with government policy measures can indeed enhance the effectiveness and precision of schemes like the Public Distribution System (PDS) and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
• Simplify the set of indicators to avoid overwhelming complexity. Prioritize the most relevant and impactful dimensions, taking into account the local context and priorities. This will help focus efforts on the most critical aspects of poverty.
• Involve local communities in the data collection process to enhance accuracy and inclusivity.
• Baseline survey should be conducted with the involvement of local communities to enhance accuracy and inclusivity.