Introduction

• A recent report by NITI Aayog highlights a significant reduction in the percentage of people living in poverty in India, indicating progress in poverty alleviation efforts.
• The report is juxtaposed against the Global Multidimensional Poverty Index (MPI) report of 2023, released by UNDP and OPHI.

Positive Trend in Poverty Reduction

• The NITI Aayog report reveals a promising decline in poverty rates from 25% in 2015-16 to 15% in 2019-21, with approximately 135 million individuals being lifted out of poverty during this period.

• The Global MPI report also showcases progress, showing a reduction in the multidimensional poverty index from 27.5% in 2015-16 to 16.2% in 2019-21.

Methodological Issues in Multidimensional Poverty Index

• While acknowledging the importance of multidimensional poverty measures, the report raises concerns about the methodology and its practical implications.

• It points out that non-income indicators of poverty, such as education, health, sanitation, and child mortality, may not always align well with the consumption-based poverty estimates.

• These dimensions are argued to be influenced by factors beyond the scope of a consumption-based approach.

Relevance of Consumption-Based Poverty Estimates

• The report highlights that consumption-based poverty estimates continue to be pertinent, suggesting that multidimensional poverty estimates should not replace National Sample Survey (NSS) consumption-based poverty ratios.

• It underscores the limitations and challenges of aggregating diverse indicators into a single index.

• Additionally, experts advocate for supplementing expenditure-based poverty estimates with indicators related to nutrition, health, education, and environment.

Data Discrepancies and Need for Surveys

• The report points to discrepancies in aggregate consumption estimates between National Accounts Statistics (NAS) and NSS data, emphasizing that such discrepancies have widened over time. It calls for an in-depth examination of these differences and suggests improvements in data collection methods through both routes.

• The report also emphasizes the importance of conducting comprehensive consumption expenditure surveys and highlights the need to account for the impact of public expenditure on health and education.

Conclusion

The NITI Aayog report highlights the positive trend in poverty reduction in India and underscores the importance of both consumption-based and multidimensional poverty measures.

It acknowledges the complexity of measuring poverty through non-income indicators and advocates for a balanced approach that considers various dimensions of poverty.

The report also calls for improved data collection methods and emphasizes the need for further research and analysis to inform poverty alleviation strategies.

Question: Discuss the recent findings of the NITI Aayog report on multidimensional poverty in India, highlighting the percentage reduction in poverty and the number of individuals lifted out of poverty. Analyze the implications of this progress for poverty alleviation strategies.