Understanding The Multidimensional Nature of Indian Poverty

Poverty in India

Current Indian population is about 1.21 billion and 17 million people are continued to be added each year at the rate of 1.41 percent. Poverty level in India is considerably high and the market reforms have failed to improve the quality of life of the poor in any meaningful way. The latest official estimate of poverty accepts the presence of 33% poor in the country. The World Bank’s $1.25 a day or less puts the figure at 42% and its $2 per day line makes 76% population poor. Some may discount these figures as mere number game. But an analysis using the latest multidimensional poverty index (MPI) of UNDP puts the figure of Indian poverty at 55%. This is more meaningful as it gives both the extent and nature of poverty using ten indicators that map health, education and living standard of people.

Multidimensional Poverty Index (MPI)

This new measure of poverty was launched in July 2010 by Oxford Poverty and Human Development Initiative (OPHI) of Oxford University and the Human Development Report Office of the United Nations Development Program (UNDP). The MPI assesses three vital dimensions of poverty – education, health, and living standard – through ten sub-indicators. It gives a much more detailed picture of poverty than the popular human poverty index (HPI) that also uses the same dimensions. Taken together, these factors provide a fuller portrait of acute poverty (or deprivations) than simple income measures such as $1.25 per day. A person or household is identified as poor if deprived in at least 30 percent of the ten weighted indicators. When this measure was applied to India many interesting observations emerged.

It showed that 55% of the Indian population is poor – deprived in 30% indicators. It is much higher than the official figure of 32.7%. About 39% population is poor in 40% indicators; 30% Indians are poor in 50% indicators, 20% people are deprived on 60% indicators, and 10% population is deprived on 70% of the 10 indicators.

The MPI analysis also reveals that at national level three largest deprivations in India are: Nutrition (biggest) followed by Child Mortality and school enrolment.

About 52% population is deprived of cooking fuel, 49% people lack proper sanitation, and 39% are undernourished.

There are more ‘MPI poor’ people (421 million) in just eight Indian states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal) than in the 26 poorest African countries combined (410 million).  

A comparison of the MPIs for various Indian states with the MPIs of the 103 other developing countries shows wide regional differences. The best performing state is Kerala and resembles Paraguay and Philippines, next best is Goa, which is close to Indonesia, and Punjab’s MPI is similar to that of the Central American nation of Guatemala.  Amongst the low performers, MPI of Madhya Pradesh is similar to DR Congo and Rwanda, while Bihar and Jharkhand have the worst MPI and compare with Somalia.

Probing multidimensional poverty castes and tribes suggested that the Scheduled Tribes (ST) are most poverty stricken: 81% ST population is poor, followed by 66% poor in the Scheduled Caste (SC) community and 58% poor among Other Backward Class (OBC). Among rest of the Hindus only 33% are MPI poor. The ST, SC and OBC community also shows high intensity of deprivation – between 52% to 59% of weighted indicators.

In also points to the fact that South Asia has the world’s highest levels of poverty: Fifty-one percent of the population of Pakistan is MPI poor, 58% in Bangladesh, and 65% in Nepal; not very different from 55% in India.                           


There are severe regional imbalances in economic growth as well as in poverty level. Indian government should pay attention to the findings of MPI analysis and take corrective policy measures to reduce suffering of people living under deprivations. Many caste and communities have always lived secluded from the mainstream society, so the “trickle down” effect of economic expansion is unlikely to reach them as it does in rather homogeneous western societies. Promotion of entrepreneurship and small enterprises in rural areas is the ideal form of development that will simultaneously eradicate poverty.