Saturday, July 17, 2010

Indexing Poverty

What is the number of people living below poverty line even after making adjustments and attempts to hide the poverty in India, that has the second largest number of billionaires in the world? It counts for about 645 million people or 55% of India's population made up of ten markers of education, health, standard of living, access to basic services, income and achievement levels. This is more than the entire population of the United States of America.

Well, there are 140 million from just 8 north Indian states of Madhya Pradesh, West Bengal, Bihar, Jharkhand, Orissa, Uttar Pradesh, Rajasthan and Chattishgarh! This is more than all the poor of the Africa put together! Many international humanitarian organizations are walking away from India, targeting on Africa and South America. Even some of my own friends from America and Europe feel that the poverty is high in those continents. True. In those continents, poverty is geographically concentrated. But here, it is widespread, making it more difficult to control.

Nutritional deprivation is overwhelmingly the largest factor in overall poverty, unsurprising given that half of all children in India are under-nourished according to the National Family Health Survey III (2005-06). Close to 40% of those who are defined as poor are also nutritionally deprived.

The "intensity" of the poverty in parts of India is equal to, if not worse than, that in Africa. When Indian Madhya Pradesh state, which has a population of 70 million, was compared with the Democratic Republic of the Congo, the war-racked African state of 62 million inhabitants, the two were found to have near-identical levels of poverty.

The Scheduled Tribes have the highest MPI (0.482), almost the same as Mozambique, and a headcount (the percentage of people who are MPI poor) of 81 per cent. The Scheduled Castes have a headcount of 66 per cent and their MPI is a bit better than Nigeria. Fifty-eight per cent of other Backward Castes are MPI poor. About one in three of the remaining Indian households are multi-dimensionally poor. In West Bengal (MPI = 0.32), 58 per cent of people are MPI poor, and they are on average deprived in 54 per cent of the dimensions or weighted indicators

The survey found that in Madhya Pradesh poverty levels were higher because of malnutrition. In Congo, access to schooling was a problem.

The study's conclusions will reinforce claims that distribution of the wealth generated by India's rapid economic growth – recently around 10% year on year – is deeply unequal. The prime minister, Manmohan Singh, and Ms. Sonia Gandhi, the chief of the ruling Congress Party have repeatedly said they want to see "inclusive" growth.

Poverty has long proved difficult to define. The World Bank bases its definition on household income and estimates that a quarter of the developing world lives on $1.25 (85p) a day or less. However, relying simply on money excluded everything that is outside the cash economy and didn't look at issues such as housing or access to safe water, or access to education and standard of living.

A comparison of the state of Madhya Pradesh and the sub-Saharan nation of the Democratic Republic of Congo (DRC), which have close to the same population and a similar MPI (0.389 and 0.393 respectively), shows that nutritional deprivation, arguably the most fundamental part of poverty, in Madhya Pradesh far exceeds that in the DRC. Nutritional deprivation contributes to almost 20% of the state's MPI and only 5% of the DRC's MPI. MP's drinking water, electricity and child mortality levels are better than that of the DRC.

The new index is also designed to track variations within countries much better. Based on the MPI, Bihar is by far the poorest of any state in the country, with 81.4% of its population defined as poor, which is close to 12% more than the next worst stateof Uttar Pradesh. In Kerala (the best in the country) there are only 16% of the population who are MPI poor.

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