Niti Aayog’s Report on Poverty Reduction Faces Scrutiny: Are 25 Crore Indians Truly Out of Poverty?

The Niti Aayog, the government’s think tank, recently released a discussion paper claiming that India has achieved a remarkable feat of lifting 24.82 crore people out of multidimensional poverty in the last nine years. The paper, based on the National Multidimensional Poverty Index (MPI) that covers 12 indicators of deprivation, shows that India’s poverty headcount ratio declined from 29.17% in 2013-14 to 11.28% in 2022-23 . However, several economists and experts have raised objections to the methodology and data used by the Niti Aayog to arrive at these estimates.

One of the main criticisms is that the paper uses projected estimates for the years 2013-14 and 2022-23, due to lack of data for these specific periods. The paper relies on the compound growth rate of the reduction in poverty levels between 2005-06 and 2015-16 and between 2015-16 and 2019-21 to extrapolate the poverty figures for 2013-14 and 2022-23. However, this assumes that the pace of poverty reduction was constant and uniform across states and indicators, which may not be realistic .

Another issue is that the paper does not account for the impact of the Covid-19 pandemic on poverty levels, especially in the year 2022-23. The pandemic has caused severe disruptions to the economy, livelihoods, health and education of millions of people, especially the poor and vulnerable. According to some estimates, Covid-19 may have pushed an additional 75 million people into extreme poverty in India in 2020 . Therefore, the projected poverty figures for 2022-23 may not reflect the ground reality.

A third concern is that the paper does not compare India’s performance with other countries or regions using a common set of indicators and thresholds. The paper uses the National MPI, which covers 12 indicators, while the global MPI, which is used by the United Nations and other agencies, covers only 10 indicators. Moreover, the National MPI uses different cut-offs and weights for some indicators than the global MPI. For instance, the National MPI considers a household as deprived in nutrition if any member is undernourished, while the global MPI considers only children under five years . Therefore, it is difficult to assess how India fares in terms of multidimensional poverty relative to other countries or regions.

The Niti Aayog’s report on poverty reduction is a commendable attempt to measure and monitor the multiple dimensions of deprivation faced by people in India. However, it also raises several questions about the validity and reliability of its estimates and projections. The report needs to be scrutinized and verified by independent experts and agencies before it can be accepted as a credible evidence of India’s progress in eliminating poverty.