(Co-author Bibek Debroy died on November 1 at the age of 69. This is his last column for NDTV, which he submitted on October 21. His other columns are available here)

The Global Multidimensional Poverty Index (MPI) is a comprehensive tool developed by the Oxford Poverty and Human Development Initiative (OPHI) and the UNDP Human Development Report Office. It was first introduced in 2010 to measure acute multidimensional poverty in more than 100 developing countries. The MPI goes beyond income-based measures of poverty by assessing deprivation along three key dimensions: health, education and living standards. These dimensions are represented through ten specific indicators, such as stunting, underweight, infant mortality, years of schooling and access to basic amenities such as clean water and electricity. Each indicator is assigned a weight, with the health and education dimensions each receiving a weight of 1/6, and the standard of living indicators collectively being weighted at 1/18 each. Individuals are considered multidimensionally poor if they are deprived of at least one third of the weighted indicators, underscoring the interdependence of deprivations.

How MPI is calculated

Methodologically, the calculation of the MPI begins by constructing a deprivation profile for each household based on survey data such as Multiple Indicator Cluster Surveys and Demographic and Health Surveys. These profiles track the deprivations of each individual in the household. The MPI is calculated as the product of incidence (H), or the proportion of people living in multidimensional poverty, and intensity (A), which measures the average share of deprivation experienced by the poor. This approach allows poverty data to be disaggregated by region, age group and other socio-demographic factors, allowing for more precise targeting of interventions.

The Multidimensional Poverty Index (MPI), which takes into account various non-monetary deprivations in health, education and living standards, reveals significant regional disparities. Sub-Saharan Africa and South Asia remain disproportionately affected, home to 83% of the world’s poor. In countries with low Human Development Index (HDI) scores, such as Niger, Chad and the Democratic Republic of Congo, high poverty rates persist, with more than half of the population living in multidimensional poverty . Although global efforts have reduced poverty, particularly in countries like Nepal and Sierra Leone, challenges related to governance, conflict and environmental shocks continue to hinder progress in many regions.

How some regions have progressed

Despite these challenges, 76 countries experienced statistically significant reductions in MPI values. Sub-Saharan Africa, although home to the largest concentration of poor people, has seen notable improvements in countries like Ethiopia and Liberia. These reductions are often attributed to strategic interventions in education, health care and infrastructure, which address the fundamental dimensions of multidimensional poverty. The COVID-19 pandemic temporarily reversed progress in some areas, but post-pandemic data shows a slow recovery in progress in most regions. This highlights the need for sustainable, evidence-based policy interventions, particularly in conflict-prone regions where poverty reduction efforts have been blocked.

India is a remarkable case in terms of global poverty reduction, particularly over the last decade. With 234 million people living in multidimensional poverty in 2024, India still accounts for the largest number of poor people in the world. However, the country’s efforts to combat poverty through large-scale programs have yielded impressive results. Since 2005-06, India has significantly reduced the MPI, with a 16.4 percentage point reduction in poverty incidence between 2015-16 and 2019-20 alone. Programs such as Pradhan Mantri Awas Yojana (housing), Swachh Bharat Abhiyan (sanitation) and Ayushman Bharat (health care) have targeted the major deprivations affecting millions of people, particularly in rural areas where poverty is most severe. widespread. Substantial improvements in key indicators such as nutrition, school attendance and access to electricity have contributed to the multidimensional reduction of poverty in India.

MPI is inadequate

But is the MPI a true measure of poverty? The answer is no. It is more of a development indicator than a true measure of poverty. As noted, the MDPI is based on three key dimensions: health, education and standard of living. Health indicators – such as nutrition, child and adolescent mortality and maternal health – as well as education indicators such as years of schooling and school attendance are undeniably crucial in shaping people’s future prospects. an individual and determine long-term poverty outcomes. However, these dimensions are more forward-looking in nature and reflect the potential for future poverty rather than the immediate deprivation reflected in living standards.

Living standards encompass access to cooking fuel, sanitation, clean water, electricity, housing, assets and financial inclusion (e.g. bank accounts), providing thus a more immediate and tangible image of poverty. If health and education are essential drivers of development, confusing them with the standard of living under the term “poverty” risks diluting the objective of measuring poverty.

Yet this elasticity is necessary because poverty is not just a matter of material deprivation; it also encompasses missed opportunities and structural disadvantages. As Sen (1999) and Nussbaum (2000) emphasize in their capabilities approach, the fight against poverty requires more than simple economic aid: it requires giving individuals the means to lead the life they value. , which implies access to education and health. In this sense, the broad scope of the MDPI reflects a deeper understanding of human development and the interdependence of various deprivations.

Why the Tendulkar Line is now obsolete

However, we need an updated population ratio to accurately measure poverty and evaluate the effectiveness of socio-economic policies. India also urgently needs a new poverty line due to the outdated nature of the existing Tendulkar line, last updated in 2011-12. As economies evolve, so do the standards of what constitutes the “bare minimum” of subsistence, but India continues to rely on this decade-old benchmark. The debate over the adequacy of the once controversial figure of ₹32 per capita per day highlights the need for a more accurate measure that reflects current economic realities. Although the Rangarajan Committee proposed a revised poverty line in 2014, it was never formally adopted, leaving India dependent on an outdated measurement system.

With the release of new data from the Household Consumption Expenditure Survey (HCES), there is an opportunity to recalibrate India’s poverty line to reflect contemporary socio-economic conditions. The HCES provides detailed information on household consumption patterns, and applying this data to a revised poverty line could provide a more accurate measure of deprivation in the country.

(Bibek Debroy was Chairman of the Prime Minister’s Economic Advisory Council, and Aditya Sinha is OSD, Research, Prime Minister’s Economic Advisory Council)

Disclaimer: These are the personal opinions of the authors