Development debate

The policy must now go beyond poverty numbers

A new discussion paper released by the NITI Aayog this week showed that about 248.2 million Indians escaped multidimensional poverty over the past nine years. Written by NITI Aayog member Ramesh Chand and senior advisor Yogesh Suri, with technical inputs from the United Nations Development Programme and Oxford Policy and Human Development Initiative, the paper intended to show the impact of various government programmes on multidimensional poverty. The paper, which reflects the personal views of the authors, found that multidimensional poverty declined from 29.17 per cent in 2013-14 to 11.28 per cent in 2022-23, and the level of poverty was expected to decline to single digits soon. Notably, the latest national multidimensional poverty index was based on the National Family Health Surveys-IV (2015-16) and -V (2019-21). Since data for the exact relevant periods was unavailable, the study made calculations based on the available data.

The multidimensional poverty index is considered a better indicator than the traditional measures. For instance, it is difficult to get income estimates. Similarly, consumption surveys have been found to be inadequate in gauging the levels of poverty and well-being. Besides, these methods may not fully capture the impact of policy interventions. The global multidimensional poverty index takes into account 10 indicators in three broad areas — education, health, and standard of living. The Indian version, apart from global indicators, also includes maternal health and bank accounts. To be sure, while the multidimensional poverty index gives a much broader picture, the need for income and expenditure data should not be underestimated.

More data on different aspects of poverty is likely to give a clearer picture and better inform policymaking. The outcome of the last consumer expenditure survey, conducted in 2017-18, was rejected by the government over data quality issues. Higher economic growth and policy interventions in the past few decades enabled significant poverty reduction. As the paper notes, the proportion of the multidimensional poor in population reduced by 40.38 percentage points in about 15 years from 2005-06. The intensity of poverty also declined significantly. While the reduction in poverty is worth celebrating, India still has a long way to go. Policy efforts, therefore, must focus on attaining and sustaining high economic growth over the long run. The country is still seen as a lower-middle-income one. Sustained high growth in per capita income will pull more people out of poverty and improve well-being.

Further, state-level data shows significant disparity. Some states have been left far behind in India’s development march. More policy attention will be needed in such areas to achieve balanced and inclusive development. Also, more work will be needed even on parameters showing improvement. The education dimension, for instance, captures years of schooling. However, it is well known that learning outcomes in India are way below the level desired. The policy interventions will partly need to focus on the next level of improvement. This may also require reorientation of government expenditure. If multidimensional poverty has declined to about 11 per cent, should the government be spending on free food for the majority of the population? Similarly, is the rising prevalence of cash transfers the way forward, or can state resources be used to bridge development gaps — to enhance the quality of education, for example? Many such policy questions need to be debated.