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Moving beyond income poverty: overall approach to help developing states

by Amit Tripathi
June 20, 2025
Moving beyond income poverty: overall approach to help developing states

The last objective of development, scheme and policies is to increase the social welfare and goodness of any society. Only income is not a complete criteria for the welfare of any society, so human development incorporates both quantitative and qualitative aspects of prosperity, including longevity, literacy and a respectable living standard.

Human development means expanding options, while poverty means depriving the most basic opportunities and options of human development.

The concept of human development encouraged by the United Nations Development Program (UNDP) was first seen in the articles of Nobel Prize winners Amartya Sen and Mehboob -ul -Haq. In 1990, UNDP published its first global human development report. Since its publication, under the guidance of Mehboob ul Haq, efforts were made to develop and refine the parameters of human development. Human development is the process of expanding people’s abilities beyond income and money.

The primary objective of development is to free people from poverty, which is associated with low life quality, deception (lack), malnutrition and illiteracy. Multidiimensional Poverty Index – Mpi is an international criteria that assesses the intensity of poverty based on lamps (scarcity) in health, education and standard of living. The index is based on the National Family Health Survey (NFHS) data. To evaluate human development from a poverty point of view, MPI was first published by NITI Aayog in the year 2021, and the second MPI report was released in July 2023 based on this assessment. This report is based on three comprehensive indicators of poverty- health, education and standard of living, including several sub-indicators. Mpi’s sub -collections are also associated with various sustainable development goals – SDGS, such as SDG 1 (Poverty End/No Poverty), SDG 2 (Zero Hunger/Zero Hunger), SDG 3 (Good Health and Welfare/Good Health & WellBeing), SDG 3 (Quality Education/Quality Education, SDG 6 (Clean Water and Cleanliness/Clean Water & Sanitation), SDG 7 (Cheap and Clean Energy/Affordable & Clean Energy), SDG 8 (Respected Work and Economic Development/Decent Work & ECONOMIC GROWTH) Inequality).

According to reports from Report 2023, India has recorded a significant decrease of 9.89 percentage points in multidimensional poverty-it fell from 24.85% in 2015-16 to 14.96% in 2019-21. Poverty was recorded the biggest decline, especially in rural areas – a decrease of 13.31 per cent, which declined from 32.59% to 19.28%. In comparison, poverty in urban areas declined by 8.65% to 5.27% to 5.27%. Talking about states, Bihar recorded the most rapid decrease in multi-faceted poverty, which declined from 51.89% in 2015-16 to 33.76% in 2019-21, ie a reduction of 18.13 percentage points. This is followed by Madhya Pradesh, where multidimensional poverty is from 36.57% to 20.63%, i.e. reduced by 15.94 percent. The other three states (Uttar Pradesh, Odisha and Rajasthan) declined by 14.75, 13.66 and 13.55 per cent, respectively. It is also worth noting that all these states (Bihar, Madhya Pradesh, Uttar Pradesh, Odisha and Rajasthan) are traditionally considered to be sick bimarou), as these states have had infrastructure shortage, poor social indicators and long -term poverty problems. Therefore, this decline in poverty in these states can be considered a major achievement. In view of rural and urban progress, the maximum reduction in rural poverty in these states was recorded in Madhya Pradesh (20.58 percent marks), followed by Bihar (19.05 percent marks) and Uttar Pradesh (17.94 percent marks). A large part of Bihar’s population resides in rural areas, so this decline in rural poverty is a major achievement for the state. Similarly, Bihar (7.18 percent marks), Odisha (6.90 percent marks) and Rajasthan (6.67 percent marks) have recorded a significant decline in urban poverty.

In the actual numbers, between 2015-16 and 2019-21, 3.43 crore people in Uttar Pradesh came out of multidimensional poverty (MPI), followed by 2.25 crore in Bihar, 1.36 crore in Madhya Pradesh, 1.08 crore in Rajasthan and 0.93 crore in West Bengal came out of poverty. A total of 13.5 million people came out of multi -faceted poverty during this period across the country. Thus, about 67 percent of the people who have come out of multidimensional poverty in India are only from these five states.

Between 2015-16 to 2019-21, the country’s MPI value (Value) decreased from 0.117 to 0.066 and the ratio of the population living in multi-faceted poverty decreased from 24.85% to 14.96%, which led to the completion of the prescribed 2030 (SDG) 1.2 (target of multi-faceted poverty). Is on the path of Also, the intensity of poverty has also come down from 47% to 44%. It reflects the government’s strategic commitment to ensure sustainable and inclusive development, which is a proof of its loyalty to Sustainable Development Goals (SDGS). The target efforts made to improve the access to essential services like cleanliness, nutrition, fuel, financial inclusion, drinking water and electricity in the country have made significant progress in these areas. All 12 MPI parameters have been significantly improved. Programs like Nutrition Campaign and Anemia Open India have reduced health -related scarcity, while Swachh Bharat Mission (SBM) and Water Life Mission (JJM) have improved 21.8 percent marks in cleanliness. The Prime Minister Ujjwala Yojana has increased the reach of cooking fuel by 14.6 percent. Rights like Saubhagya, Pradhan Mantri Awas Yojana, Pradhan Mantri Jan Dhan Yojana and overall education have also helped reduce multidimensional poverty. In particular, the country has seen a significant decrease in the lack of electricity, bank account access and drinking water.

If the performance of the states is noted, it was observed that the country’s 2.60% population has the lowest (0.55%) ratio of multidimensional poverty in 2019-21, while the country has the highest (33.76%) in the country with 9.00% population. In particular, in these five years, Bihar, Madhya Pradesh and Uttar Pradesh have seen the biggest decrease in multi -faceted poverty, which means that the welfare schemes of the states have effectively reached every poor person. The rapid decrease in poverty is the result of these efforts. Therefore, the states have done well and are still trying to improve it.

After the Planning Commission is abolished in 2015, currently general purpose financial transfer is made by the Finance Commission, while the transfer of specific purpose is the responsibility of the concerned ministries. Therefore, to remove regional inequalities and promote more equality, the 16th Finance Commission (FC16) can include multidimensional standards of distribution of resources among the states (Horizontal Criteria) can be included in the level of multi -faceted splitting (lack). Now similarly, the MPI scores of the states can also be included in horizontal norms to measure the lack of poverty or poverty limit for the distribution of taxes among the states.

Dr. Barna Ganguly is a faculty member in Bihar Public Finance and Policy Institute (BIPFP).

Manoj Narayan is a social policy expert.

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