MULTIDIMENSIONAL POVERTY INDEX

MULTIDIMENSIONAL POVERTY INDEX (MPI)

In her Interim Budget speech, Finance Minister Nirmala Sitharaman said 25 crore Indians had been 

pulled out of poverty over the past decade. 

What is the Multidimensional Poverty Index (MPI)?

 Traditionally, poverty is calculated based either on income levels or, if income data are not available, 

on expenditure levels. 

 The MPI approaches poverty diff erently. Globally, the MPI uses 10 indicators covering three main 

areas: (i) health, (ii) education, and (iii) standard of living. 

 These three dimensions have one-third weight each in the fi nal index.

 The health dimension includes nutrition and child & adolescent mortality indicators. 

 The education dimension includes years of schooling and school attendance indicators. 

 The standard of living dimension includes six household-specifi c indicators: housing, household 

assets, type of cooking fuel, access to sanitation, drinking water, and electricity.

 The Indian MPI has two additional indicators: maternal health (under the health dimension) and 

bank accounts (under the standard of living dimension). 

 This has been done, according to the NITI Aayog, to align the MPI with India’s national priorities.

 Under the MPI method, if someone lacks at least one-third or more of the 10 specifi ed indicators, 

they are considered “MPI poor.”

INDIAN &