Explained: How NITI Aayog calculates the National Multidimensional Poverty Index

NITI Aayog, the government think tank, on Friday released the National Multidimensional Poverty Index (NMPI) baseline report that defines poverty as the deprivation in crucial and basic parameters of health, education and living standards.

The report was based on the National Family Health Survey 4 (NFHS-4), which was conducted between 2015 and 2016, and developed by the NITI Aayog in consultation with 12 ministries and in partnership with state governments and the index publishing agencies, namely, Oxford University’s Oxford Poverty and Human Development Initiative (OPHI) and United Nations Development Programme (UNDP).

Here is how the think tank developed the report.

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Why NFHS-4 ?

Data collected during the NFHS-4 (2015-2016) corresponds to the period before the full roll out of government schemes on housing, drinking water, sanitation, electricity, cooking fuel, financial inclusion, and other major efforts towards improving school attendance, nutrition, mother and child health, etc.

“Hence it serves as a useful source for measuring the situation at baseline i.e. before large-scale rollout of nationally important schemes,” the government said in a statement on Saturday.

Pradhan Mantri Awas Yojana (PMAY), Jal Jeevan Mission (JJM), Swachh Bharat Mission (SBM), Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), Pradhan Mantri Ujjwala Yojana (PMUY), Pradhan Mantri Jan Dhan Yojana (PMJDY), POSHAN Abhiyaan and Samagra Shiksha were some of such welfare schemes that were listed by the Union government.

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How is the data used ?

The national MPI 2021 is calculated using the household microdata collected at the unit-level for the NFHS-4 that is used to derive the baseline multidimensional poverty. This baselines denote the country’s standings before the full roll out of the aforementioned government schemes.

Further, the country’s progress would be measured using this baseline in the NFHS-5, for which the data was collected between 2019 and 2020.

The progress of the country with respect to this baseline will be measured using the NFHS-5 data collected in 2019-20.

“The NFHS 5 2019-20 summary fact sheets for all States and Union Territories was released by IIPS and MoHFW on 24 November 2021. National MPI based on NFHS 5 of the data period 2019-20 will be computed when the unit level micro data for the same is released by IIPS and MoHFW next year,” the government said.

Calculating MPI

The multidimensional poverty index is calculated using 12 indicators -- nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account -- that have been grouped under three dimensions namely, health, education and standard of living.