Look beyond the obvious | Ajay Chhibber

11 May 2012

Weaving woman in India Better poverty measures are central for improving development programmes in India. Photo: UNDP

India’s Prime Minister Manmohan Singh's decision to set up a new panel for re-examining the measurement of poverty is a fresh opportunity to rethink India's approach towards poverty. The question is: if we no longer measure human progress by income alone, then why do we still use income as a measure of poverty?

In 1990, the United Nations Development Programme (UNDP)'s Human Development Index (HDI) broadened the measure of human progress beyond income to include health and education. This idea had its initial skeptics but today HDI is an accepted measure of human progress.

Twenty years later, UNDP, working with scholars of Oxford University, proposed a Multi-Dimensional Poverty Index (MPI). The MPI measures poverty by taking into account access to education, health, water, sanitation, etc.

Such an approach will not only give us a better measure of poverty but it will also help widen our understanding of the nature of poverty. There are countries like China, Sri Lanka and Uzbekistan, where the poverty rate based on the MPI is lower than the one based on income poverty because other criteria such as health, education and shelter come into play.

Many countries have now started calculating both the MPI and income poverty, as these measures complement each other and give us a more complete picture of the nature of poverty and deprivation.

India should celebrate the decline in poverty from 2004-5 to 2009-10 as measured by income poverty due to its rapid growth. But the multi-dimensional deprivations faced by more than half of its population need faster growth and also concerted and effective programmes to deliver basic health, education, access to water and sanitation, cooking fuel and a house with a paved floor.

Many poor people face multiple deprivations on these counts while they may have reached a minimal income poverty line and are not considered extremely poor by that yardstick. Acknowledging this through better poverty measures will be a first step.

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