Poverty declines, but battle not over

Persisting challenges in nutrition, education and sanitation in many districts underscore the need for a bottom-up effort to eradicate deprivation

As we mark 76 years of independence, the latest poverty numbers from the multidimensional poverty index (MDPI) for India for 2019-21 made me happy for two reasons. First, because they showed that about 415 million people have come out of poverty between 2005-06 and 2019-21. Second, because when I was responsible for the United Nations Development Programme’s (UNDP’s) Asia-Pacific work from 2008 to 2013, I had pushed hard for countries in the region to adopt the MDPI as a complement to the income- or consumption- expenditure-based poverty estimates. Many countries in the Asia-Pacific agreed, but India remained a holdout then.

Subsequently, with persistent efforts by UNDP-India, the NITI Aayog adopted the MDPI, whose results based on the National Family Health Surveys (NFHS) are now available for 2005-06, 2015-16 and 2019-21. I had left UNDP by then, so cannot claim any credit for this change, but am nevertheless delighted that they did. To get a better understanding of the nature of poverty, we need the MDPI, especially in a diverse country like India. Moreover, using income poverty measures alone, can be faulty. A family can meet the income poverty cut-off through daily wages, yet be living in a tattered shelter, on the edge of drains without any sanitation or drinking water, as many do in slums across the country.

The MDPI is composed of health, education and standard of living, which is measured using the Alkire-Foster methodology. For the standard of living, it uses access to housing, cooking fuel, sanitation, drinking water, and assets, but not income (consumption) and, therefore, does not rely on National Sample Survey data. In India’s case, maternal health and access to banking have been added as additional indicators in the MDPI. Maybe in the future, internet access should be added as well. It is fortunate that we have this measure because in the absence of an NSS Survey for consumption expenditure since 2011-12,“credible” income poverty measures are not available.

The MDPI results do show substantial poverty eradication — especially in rural areas. While 280 million people came out of poverty between 2005-06 and 2015-16, another 135 million people exited poverty between 2015-16 and 2019-21 — so the MDPI estimates indicate a steady decline in poverty. They also show a faster decline in poverty in poorer states, such as Uttar Pradesh (UP), Bihar, Jharkhand, Madhya Pradesh (MP), Chhattisgarh and Rajasthan, the so-called Hindi heartland. Poverty has also declined sharply in Jammu & Kashmir and in Ladakh.

The NITI Aayog 2023 report on MDPI says schooling, nutrition, cooking fuel, and sanitation were the primary drivers — but on closer examination, nutrition and cooking fuel numbers don’t show that so clearly. And the picture varies considerably across the country. For example, Rajasthan did very well in years of schooling and school attendance, but surprisingly Andhra and Telangana did not do so well. Attendance does not ensure learning — in Rajasthan, only about 36 per cent of students in Class 5 can read at Class 2 level, according to ASER surveys. Nevertheless, getting children to school is a first step.

In contrast to school attendance, Rajasthan did not do well in access to cooking fuel and neither did a bunch of other states, such as MP, Bihar, UP, Jharkhand, West Bengal, Assam, Odisha, and Haryana. Only Andhra Pradesh, Telangana, Karnataka, and Manipur did relatively well in that area, suggesting that the PM Ujjwala scheme needs to be investigated and improved. Sanitation improvements were a major poverty reducing factor in poor states like Bihar, UP, MP, Jharkhand and Chhattisgarh as well as in Manipur and Nagaland. This is good news but looks surprisingly positive. A survey by the Research Institute for Compassionate Economics in 2018 found that 71 per cent of the rural population in UP, Bihar, MP and Karnataka owned a toilet, but only 50 per cent used them.

 UP, Bihar, Jharkhand and Assam did well on improving electricity connections, but Meghalaya remains behind in that area. However, the recorded improvements in connections do not ensure uninterrupted electricity. Access to proper housing shows the smallest improvements across most states in the country — suggesting PM Awas Yojana needs a review. Nutrition, too, remains a major issue in India with insufficient improvements across most states. Only J&K, Ladakh, Uttrakhand, and MP showed significant nutritional improvements.

Huge variations also exist between districts in addressing poverty. In Bihar, the state with the largest poverty, Champaran, Darbhanga, and Begusarai saw huge improvements. But districts like Araria, Purnia and Supal are still struggling with their anti-poverty efforts. Likewise, in a much richer state like Karnataka, districts like Kalaburga, Koppal and Gadag are still lagging, while Yadgir, Raichur and Bagalkote have moved forward to reduce poverty substantially. Districts with the largest reduction in poverty between 2015-16 and 2019-21 are Kalahandi (Orissa), Alirajpur and Barwani (MP), Udaipur and Barmer (Rajasthan), Maharajganj and Gonda (UP) and Dang (Gujarat). The only district that saw an increase in poverty was Bijapur (Chhattisgarh). This indicates that while national programmes matter, what is crucial is their implementation at the district and municipal level.

India has reduced poverty hugely, but still has the largest number of poor people in the world — approximately 230 million in 2019-21, of which over 90 million are children. Focusing on their nutrition through improved meal programmes in Anganwadis and schools could make a huge impact. Since more than 70 per cent of the NFHS 2019-21 was conducted before the pandemic, it’s likely that more people fell back into poverty due to the pandemic. According to one estimate, another 70 million became poor — so we may have closer to 300 million poor. At the current pace we may not see poverty completely eradicated by 2030, so the efforts to eliminate poverty must be accelerated. But what these MDPI indicators tell us is where to strengthen the fight against poverty. Efforts need to be stepped up not just across India, but in each state and Union Territory and even in each district. The battle against poverty will not be won just by a top-down approach, it will require a bottom-up effort as well.

The writer is a distinguished visiting scholar, Institute for International Economic Policy, George Washington University, and former UN Assistant Secretary General