India recently relinquished its numerouno position of being home to the largest number of poor according to the Future Development blog of the World Bank’s Brooking Institute. Now, Nigeria has become home to the largest number of poor people or people living on less than USD 1.90 a day. It houses 87 million such people whereas India had just 73 million people as on May 2018.It has also been estimated that the number of people leaving poverty every minute is highest in India.However, a focus on income to arrive at poverty numbers for a country is only one aspect.Following the work of Sen (1999), the focus in the recent times has shifted to consider development as freedom from poverty, poor economic opportunities and social deprivations. Moreover, academicians argue that multidimensional estimates of poverty are a better indicator of poverty than unidimensional indicators. Additionally, as a statistic, poverty indicators estimated through unidimensional indices varies a great deal from poverty estimated using multidimensional indexes.
First, the Multidimensional Poverty Index (MPI)calculated by University of Oxfordassesses poverty by capturing deprivations with respect to health, education and living standards using indicators such as nutrition, school attendance and housing.In the Indian context itself, there is no corroboration between income aspects of deprivation and non-income parameters. Kerala, for example, has the lowest MPI i.e. lowest poverty (0.004) amongst all the Indian states but it has the 11th largest GDP per capita. Maharashtra with an MDI of 0.069 at 18th rank has the 7th largest GDP per capita.
Second, based on the same report, while the population that has been living in severe poverty (with intensity higher than 50%) has shrunk from 28.6% in 2016 to 15.7% in 2017, the population that is vulnerable to poverty i.e. who experience 20-33.32% intensity of deprivations has increased from 16.4% in 2016 to almost 23% in 2017.There is also no agreement on the basic issue regarding the inclusion of vulnerable individuals in poverty assessment. According to various studies, the population that is vulnerable to poverty far exceeds the population that is currently poor .The conclusion derived by World Bank, however, does not consider vulnerability in its estimates.
Third, this observation is further reinforced once we consider the latest Human Development Index (HDI) rankings released by UNDP. India moved up one rank to 130 from 131 out of 189 countries improving its score from 0.636 in 2016 to 0.640 in the current year. However, adjusting the score to inequality reduces it to 0.468, a loss of around 37%. Last year, while India�s HDI was 0.624, it fell by around 27% to 0.455 after adjusting for inequality.This shows how India�s gain in parameters such as schooling, life expectancy and per capita incomes are being lost to increases in inequality.Although, unequal growth in incomes over a period of time is not India specific but a striking observation in its case is that inequality in India is at its highest level since 1922.
Thus, reaching a conclusion on the basis of change in ranks is not a robust indicator of decline in poverty. The above-mentioned factors should also be taken in to account while arriving at a full picture of poverty.