Women in Agriculture

Lesson 20 : Dimensions and Indicators of Poverty

Poverty line

Recently the government of India accepted the Kelkar Committee’s definition of poverty line that is somewhat broader – it also considers health and education. Though critics are still not pleased, it does offer some improvement. Using this definition, the 2010 data reveal that 32.7% people live in poverty . It only meant that the number of “officially poor” increased to 405 million in March 2011 compared with 370 million in 2005.

Other Poverty Lines:
The World Bank estimated that 42% people were surviving on less than 1.25 dollars a day in 2005; compares it with Asian Development Bank’s estimate of 55% based on the 1.35 dollar benchmark. These are significantly higher than the new official estimate of 37% of the population in poverty for the same year. In fact, rural poverty of 41.8% closely matches with the World Bank’s estimate of 42%. Incidentally, a 2 dollar a day poverty line makes over 75% Indians poor. However, regardless of which number is used to define the poverty line, one only gets an idea of the number of poor and learns nothing about the nature of their poverty or suffering.

Composite Poverty Indices:
Income based approach to poverty can not tell any thing about other forms of deprivations poor go through. Poverty is basically a denial of a range of material needs such as nutritious food, safe drinking water, shelter, healthcare, education, etc. Therefore, multidimensional poverty measures provide better understanding of the nature of poverty – at local, regional, national, and world level.

Global Hunger Index (GHI)

• The Global Hunger Index (GHI) is basically a measure of malnutrition and hunger – two biggest enemies of the poor. It is focused on three measures weighted equally:
• Proportion of people who are undernourished.
• Proportion of children under five who are underweight.
• Child mortality rate.
• In the recent Global Hunger Index 2010, India is among 29 countries with the highest levels of hunger, stunted children, and poorly fed women. It ranked 67th out of 84 developing countries and was way behind China (9th) and Pakistan (52nd). Bangladesh was right after India at 68th position. India’s performance was adversely affected due to high levels of underweight children resulting from the low nutritional and social status of women in the country. In India, 46% children under five are undernourished compared to just 5% in Pakistan. Even the neighboring Nepal (56th)and Sri Lanka (39th) as well as Sudan and North Korea did better than India. Such insight is not possible from pure income based poverty lines.
• In 2008 when the GHI was applied to 17 individual states of India covering over 95% of the population, there was a wide variation between states – the best was Punjab and the worst was Madhya Pradesh. 12 states had “alarming” poverty and Madhya Pradesh showed “extremely alarming” level of poverty; none of the states was free from “serious” poverty.

Human Poverty Index (HPI)
The UN’s Human Poverty Index (HPI) is another widely used poverty indicator. It is calculated differently for developing (HPI-1) and developed (HPI-2) countries and the two are not comparable. It focuses on lack of three basic dimensions of poverty:

• Longevity
• Knowledge
• Standard of living

For the developing countries, the first deprivation relates to survival – the likelihood of death before the age of 40. The second relates to education – those who are excluded from reading and communication (the level of illiteracy). And the third dimension incorporates a measure of standard of living – percentages of people without lack of safe drinking water and undernourished children.

• Of the 182 countries ranked in 2009,Indiawas located at the 134 position much behind China at position 92. Afghanistan and Niger occupied the bottom two spots. The country with best HPI were Norway followed by Australia and Iceland at 2 and 3 rank; Japan at 10, US at 13 and UK at 21. Pakistan was ranked somewhat below at 141, if that can be taken as solace. Bhutan and Laos did better than India on this index.
• From 2010, HPI has been replaced by a better and more comprehensive poverty measure, the multidimensional poverty index (MPI) which is described below.

Multidimensional Poverty Index (MPI) :

• In July 2010, the United Nations Development Program (UNDP) and the UK based Oxford Poverty and Human Development Initiative (OPHI) came up with a new measure of poverty, called Multidimensional Poverty Index (MPI), which will replace the HPI. The new measure attempts to go beyond income poverty and gives a broader understanding of different types of deprivation the poor may face.
• It is more comprehensive than the HPI and incorporates ten weighted indicators that measure education, health and standard of living. The Indicators used are:
• Education: Years of schooling and child enrollment (education) (each with 1/6 weight-age);
  Health : Child mortality and nutrition (each with 1/6 weight-age);
  Standard of Living : Electricity, flooring, drinking water, sanitation, cooking fuel and assets (each with 1/18 weight-age).
• The MPI reflects both the extent of poverty and its intensity and throws up some new light on Indian poverty. A person is poor in this index if he is deprived on at least 30% weighted indicators. By this definition, 55% of India is poor, twice the official figure of 27% (which now stands revised to 32.7% for 2010 data and new poverty line definition), and almost 20% of Indians are deprived on 6 of the 10 indicators.
• Comparing MPI ranks of individual Indian states with other countries, MPI suggests that there are more poor people (421 million) in the eight Indian states of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal than in the 26 poorest African countries combined (410 million).
• MPI was also calculated for individual states of India and compared with MPIs of the 103 other developing countries. It revealed that the magnitude of regional differences within India almost range from that of a reasonably well off Indonesia to that of a desperately poor Somalia.
• State with the best MPI is Kerala that resembles Paraguay and Philippines, next best is Goa, which is close to Indonesia, Punjab’s MPI is similar to that of the central American nation of Guatemala while HP is close to the north African Morocco, and TN is akin to Ghana, a sub-Saharan nation. Amongst the low performers, MPI of MP is similar to DR Congo and Rwanda, while Bihar and Jharkhand have the worst MPI and can be compared with Somalia.