(The co-author, Bibek Debroy, died on November 1 at the age of 69. This is his last column for DailyExpertNews, which he submitted on October 21. His other columns can be found here)
The Global Multidimensional Poverty Index (MPI) is a comprehensive tool developed by the Oxford Poverty and Human Development Initiative (OPHI) and the UNDP Human Development Report Office. It was first introduced in 2010 to measure acute multidimensional poverty in more than 100 developing countries. The MPI goes beyond income-based poverty measures by assessing deprivation across three key dimensions: health, education and living standards. These dimensions are represented by ten specific indicators, such as stunting, underweight, infant mortality, years of schooling and access to basic services such as clean water and electricity. Each indicator is assigned a weight, with the health and education dimensions each given a 1/6 weight, and the living standards indicators together given a weight of 1/18. Individuals are considered multidimensionally poor if they are disadvantaged on at least one-third of the weighted indicators, highlighting the interconnectedness of deprivations.
How MPI is calculated
Methodologically, the MPI calculation starts with establishing a poverty profile for each household, based on survey data such as Multiple Indicator Cluster Surveys and Demographic and Health Surveys. These profiles track the hardships of each individual in the household. The MPI is calculated as the product of the incidence (H), or the share of people who are multidimensionally poor, and the intensity (A), which measures the average share of hardship experienced by the poor. This approach allows poverty data to be disaggregated by region, age group and other socio-demographic factors, allowing for more precise targeting of interventions.
The Multidimensional Poverty Index (MPI), which takes into account various non-monetary deprivations in healthcare, education and living standards, reveals significant regional differences. Sub-Saharan Africa and South Asia continue to be disproportionately affected and are home to 83% of the world's poor. In countries with low scores on the Human Development Index (HDI), such as Niger, Chad and the Democratic Republic of Congo, high poverty rates persist, with more than half of the population living in multidimensional poverty. While global efforts have reduced poverty, especially in countries such as Nepal and Sierra Leone, governance challenges, conflict and environmental shocks continue to hinder progress in many regions.
How some regions have made progress
Despite these challenges, 76 countries have witnessed statistically significant reductions in MPI levels. In the sub-Saharan part of Africa, despite housing the largest concentration of poor people, notable improvements can be seen in countries such as Ethiopia and Liberia. These reductions are often attributed to strategic interventions in education, health and infrastructure, which address core dimensions of multidimensional poverty. The COVID-19 pandemic temporarily reversed gains in some areas, but post-pandemic data shows progress is slowly resuming in most regions. This underlines the need for sustainable, evidence-based policy interventions, especially in conflict-prone regions where poverty reduction efforts have been hampered.
India has been a standout example in global poverty reduction, especially in the past decade. With 234 million people living in multidimensional poverty in 2024, India still accounts for the largest number of poor people worldwide. However, the country's efforts to tackle poverty through large-scale programs have yielded impressive results. Since 2005-06, India has significantly reduced the MPI, with a 16.4 percentage point decline in poverty incidence between 2015-16 and 2019-20 alone. Programs such as the Pradhan Mantri Awas Yojana (housing), Swachh Bharat Abhiyan (sanitation) and Ayushman Bharat (healthcare) have targeted the key hardships faced by millions of people, especially in rural areas where poverty is most prevalent. Significant improvements in key indicators such as nutrition, school attendance and access to electricity have boosted multi-dimensional poverty reduction in India.
MPI is inadequate
But is MPI a true measure of poverty? The answer is no. It is a development indicator rather than a true measure of poverty. As discussed, MDPI is based on three key dimensions: health, education and living standards. Health indicators – such as nutrition, child and adolescent mortality and maternal health – together with educational data such as years of education and school attendance, are undeniably crucial in shaping an individual's future prospects and determining the long-term consequences of poverty term. However, these dimensions are more forward-looking in nature and include the potential for future poverty rather than the immediate deprivation that living standards reflect.
Living standards include access to cooking fuel, sanitation, drinking water, electricity, housing, assets and financial inclusion (e.g. bank accounts), creating a more direct and tangible picture of poverty. While health and education are crucial drivers of development, lumping them with living standards under the umbrella of 'poverty' risks diluting the focus of measuring poverty.
Yet this elasticity is necessary because poverty is not just about material deprivation; it also includes missed opportunities and structural disadvantages. As Sen (1999) and Nussbaum (2000) emphasize in their capabilities approach, tackling poverty requires more than just economic relief; it requires empowering individuals to live lives they value, which involves access to education and healthcare. In this sense, MDPI's broad scope reflects a deeper understanding of human development and the interconnectedness of various hardships.
Why the Tendulkar line is now outdated
However, we need an updated workforce to accurately measure poverty and assess the effectiveness of socio-economic policies. India is also in dire need of a new poverty line due to the outdated nature of the existing Tendulkar Line, which was last updated in 2011-2012. As economies evolve, so do the standards for what constitutes an 'bare minimum' for livelihood, yet India continues to rely on this decade-old benchmark. The debate over the adequacy of the ₹32 per capita per day figure, once a lightning rod for controversy, highlights the need for a more accurate measure that reflects current economic realities. Although the Rangarajan Committee proposed a revised poverty line in 2014, it was never officially adopted, leaving India dependent on an outdated benchmark.
With the release of new data from the Household Consumption Expenditure Survey (HCES), there is an opportunity to recalibrate India's poverty line to reflect contemporary socio-economic conditions. The HCES provides detailed insight into household consumption patterns, and applying this data to a revised poverty line could provide a more accurate measure of poverty in the country.
(Bibek Debroy was Chairman of the Prime Minister's Economic Advisory Council, and Aditya Sinha was OSD, Research and Economic Advisory Council to the Prime Minister)
Disclaimer: These are the personal opinions of the authors
