Model Answer
0 min readIntroduction
Poverty, at its core, represents a deprivation of basic human needs. Traditionally, poverty in India has been measured using income or consumption expenditure as the primary indicator, establishing a poverty line below which individuals are considered poor. The Rangarajan Committee (2014) estimated that 22.3% of India’s population was below the poverty line in 2011-12. However, a purely income-based approach offers an incomplete picture of deprivation. Increasingly, there’s a recognition that non-income dimensions – encompassing health, education, access to sanitation, and social inclusion – are crucial for a holistic understanding of poverty and should be treated as complementary to the income dimension.
Income-Based Poverty Measurement: A Limited Perspective
The conventional approach to measuring poverty in India relies heavily on the consumption expenditure method. This involves determining a minimum expenditure level required to meet basic nutritional and essential non-food requirements. Individuals falling below this threshold are classified as poor. The Planning Commission initially used this method, and it continues to be used by the National Sample Survey Office (NSSO). However, this approach suffers from several limitations:
- Ignores Inequality: It provides an aggregate picture and doesn’t reflect the distribution of poverty within a population.
- Sensitivity to Price Fluctuations: The poverty line is susceptible to changes in prices, potentially underestimating or overestimating poverty levels.
- Doesn’t Capture Deprivation in Other Dimensions: It fails to account for the lack of access to essential services like healthcare, education, and sanitation, which significantly impact quality of life.
The Significance of Non-Income Dimensions
Non-income dimensions of poverty are critical for understanding the multifaceted nature of deprivation. These dimensions directly impact human capabilities and opportunities. Here’s a breakdown of their importance:
- Health: Poor health reduces productivity, increases healthcare costs, and perpetuates the cycle of poverty. Malnutrition, lack of access to healthcare, and inadequate sanitation contribute to poor health outcomes.
- Education: Lack of education limits employment opportunities and hinders social mobility. Illiteracy and low levels of schooling restrict access to better-paying jobs and participation in civic life.
- Access to Basic Amenities: Lack of access to clean water, sanitation, electricity, and housing significantly impacts living standards and overall well-being.
- Social Inclusion: Social discrimination and exclusion based on caste, gender, or religion can limit access to resources and opportunities, exacerbating poverty.
Multidimensional Poverty Index (MPI): A Complementary Approach
Recognizing the limitations of income-based measures, the Multidimensional Poverty Index (MPI), developed by the Oxford Poverty and Human Development Initiative (OPHI) and the UNDP, offers a more comprehensive assessment of poverty. The MPI considers multiple deprivations at the household level across three dimensions: health, education, and standard of living.
MPI in India: According to the National MPI released by NITI Aayog in 2023, 15.2% of India’s population was multidimensionally poor in 2019-21. This figure is significantly higher than the headcount ratio based on income alone, highlighting the importance of considering non-income dimensions.
Policy Implications and Complementarity
Treating non-income dimensions as complementary to income is crucial for effective poverty reduction strategies. Policies should focus on:
- Investing in Human Capital: Expanding access to quality education and healthcare is essential for improving human capabilities and breaking the cycle of poverty.
- Improving Access to Basic Amenities: Ensuring universal access to clean water, sanitation, electricity, and affordable housing is vital for improving living standards. Schemes like the Swachh Bharat Mission and Pradhan Mantri Awas Yojana are steps in this direction.
- Promoting Social Inclusion: Addressing social discrimination and promoting equal opportunities for all is crucial for ensuring that marginalized groups have access to resources and opportunities.
- Targeted Interventions: Identifying and addressing the specific deprivations faced by different groups is essential for designing effective poverty reduction programs.
| Dimension | Income-Based Measure | Non-Income Based Measure (MPI) |
|---|---|---|
| Focus | Consumption expenditure | Multiple deprivations across health, education, and standard of living |
| Limitations | Ignores non-monetary aspects of well-being | Data intensive and complex to calculate |
| Policy Relevance | Useful for tracking overall economic progress | Helps identify specific areas of deprivation and target interventions |
Conclusion
In conclusion, while income remains a crucial indicator of poverty, a holistic understanding requires incorporating non-income dimensions. The MPI provides a valuable complementary approach, revealing a more nuanced picture of deprivation in India. Effective poverty reduction strategies must move beyond solely focusing on economic growth and prioritize investments in human capital, access to basic amenities, and social inclusion. A combined approach, leveraging both income-based and non-income-based measures, is essential for achieving sustainable and inclusive development and ensuring a dignified life for all citizens.
Answer Length
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