Multidimensional Poverty: India is Home to 75% of World's Population Deprived of Basic Living Standards

Over 75% of the world's poor deprived of basic living standards (nutrition, cooking fuel, sanitation and housing) live in India compared to 4.6% in Bangladesh and 4.1% in Pakistan, according to a recently released OPHI/UNDP report on multidimensional poverty.  Here's what the report says: "More than 45.5 million poor people are deprived in only these four indicators (nutrition, cooking fuel, sanitation and housing). Of those people, 34.4 million live in India, 2.1 million in Bangladesh and 1.9 million in Pakistan—making this a predominantly South Asian profile". 

Global Multidimensional Poverty Index 2022. Source: OPHI/UNDP
Income Poverty in Bangladesh, India and Pakistan. Source: Our World...

The UNDP poverty report shows that the income poverty (people living on $1.90 or less per day) in Pakistan is 3.6% while it is 22.5% in India and 14.3% in Bangladesh. In terms of the population vulnerable to multidimensional poverty, Pakistan (12.9%) does better than Bangladesh (18.2%) and India (18.7%)  However, Pakistan fares worse than India and Bangladesh in multiple dimensions of poverty. The headline multidimensional poverty (MPI) figure for Pakistan (0.198) is worse than for Bangladesh (0.104) and India (0.069). This is primarily due to the education and health deficits in Pakistan. Adults with fewer than 6 years of schooling are considered multidimensionally poor by OPHI/UNDP.  Income poverty is not included in the MPI calculations. The data used by OHP/UNDP for MPI calculation is from years 2017/18 for Pakistan and from years 2019/2021 for India. 

Multidimensional Poverty in South Asia. Source: UNDP

The Indian government's reported multidimensional poverty rate of 25.01% is much higher than the OPHI/UNDP estimate of 16.4%. NITI Ayog report released in November 2021 says: "India’s national MPI identifies 25.01 percent of the population as multidimensionally poor".

Multidimensional Poverty in India. Source: NITI Ayog via IIP

Earlier this year,  Global Hunger Index 2022 reported that  India ranks 107th for hunger among 121 nations. The nation fares worse than all of its South Asian neighbors except for war-torn Afghanistan ranked 109, according to the the report. Sri Lanka ranks 64, Nepal 81, Bangladesh 84 and Pakistan 99. India and Pakistan have levels of hunger that are considered serious. Both have slipped on the hunger charts from 2021 when India was ranked 101 and Pakistan 92.  Seventeen countries, including Bosnia, China, Kuwait, Turkey and UAE, are collectively ranked between 1 and 17 for having a score of less than five.

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Comment by Riaz Haq on May 27, 2023 at 7:53am

Why #India will continue to lag behind #China as a global #economic power.
https://www.scmp.com/comment/opinion/article/3221803/why-india-will...

by David Dodwell

There is magical thinking among forecasters who talk of an “Indian century”, with Modi’s India set to overtake China, not simply in population but as a dynamo for global growth.
Alok Sheel, a former secretary of India’s Economic Advisory Council, injected some much-needed realism: “If India were to grow at the very optimistic, and currently unlikely, rate of 9 per cent going forward, and China were to slow down to 4 per cent, the Indian economy would be 70 per cent of China’s size by mid-century.”
So many factors sit in the way of sustainable strong growth in India. Nearly 43 per cent of the population works in the farming sector, compared to 25 per cent in China. Underemployment, much of it informal and undocumented, hampers any pathway to higher productivity.

While India’s education spending is higher than in China (as a percentage of government expenditure), literacy remains at 74 per cent, compared with 97 per cent in China, with almost 27 per cent of India’s population lacking any formal education. Women account for a large share of the illiterate, contributing to the reality that just 19 per cent of women participate in the workforce, compared with 61 per cent in China.
A failure to spend adequately on education, health, social welfare and other key infrastructure also shackles progress. Just 46 per cent of Indians have access to safe sanitation (compared with 70 per cent in China), and only 43 per cent have access to the internet (70 per cent in China).
One can juggle data ad nauseam, but the reality of the past 40 years remains unchanged: Indian progress is welcome but slow, and the country will continue to lag behind China.
The rising economic heft of the Global South will give India a seat at top tables like the G20, but there is no way Biden can magically think away the reality of China as a global economic force. The 21st century may not be India’s century, but it is almost certainly Asia’s century, and Washington needs to come to terms with that.
David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades

Comment by Riaz Haq on June 18, 2023 at 6:46pm

Ultra-rich individuals are projected to keep leaving India in 2023. Why do the rich migrate from a country?

https://indianexpress.com/article/explained/explained-economics/exp...

According to the latest edition of the Henley Private Wealth Migration Report (2023), India is expected to witness a net outflow of 6,500 ultra-rich. The more technical term for these ultra rich is High Net-Worth Individuals (HNWIs) and it refers to people so rich that they have an investable wealth of US$1 million or more. In rupee terms that threshold means Rs 8.2 crore or more. Investible wealth refers to an individual’s net investable assets, namely, all their investable assets (property, cash and equities) minus any liabilities.

India’s likely net outflow (net of inflow and outflow) in 2023 will make it the second worst performer on losing HNWIs after China. In 2022, India saw an outflow of 7,500 such individuals.


“The top five destinations for net inflows of high-net-worth individuals in 2023 are projected to be Australia, the UAE, Singapore, the USA, and Switzerland. On the flip side, the largest net outflows of millionaires are expected to come from China, India, the UK, Russia, and Brazil,” writes Andrew Amoils, the Head of Research at New World Wealth, the organisation that provides the data for this report (SEE CHARTS 1 and 2 for countries witnessing biggest net outflows and inflows).


To be sure, as of the end of 2022, India was among the 10 richest countries in the world — ranked 10th in the so-called W10 grouping — if one goes by the HNWI population. India has 3,44,600 HNWIs, 1,078 centi-millionaires (those with wealth exceeding $100 million) and 123 billionaires (those with wealth exceeding $1 billion or Rs 8,200 crore). India has a population of 1,428 million.

For comparison, China has 7,80,000 HNWIs and 285 billionaires while the US (with a population of just 340 million) has 52,70,000 HNWIs and 770 billionaires. The W10 includes (in order of HNWIs in each country) the US, Japan, China, Germany, the UK, Switzerland, Australia, Canada, France, and India.

Explaining what motivates the world’s wealthiest to migrate from one country to another, Juerg Steffen, CEO of Henley & Partners, writes:

“Affluent families are extremely mobile, and their transnational movements can provide an early warning signal in terms of a country’s economic outlook and future country trends. Like the proverbial canary in the coal mine, they alert us to dangers that may lie ahead as they are more sensitive to potential threats to their wealth and usually have the resources to take a corrective course of action to preserve their legacies. An increasing outflow of millionaires often points to a drop in confidence in a country, since high- and ultra-high-net-worth individuals have the means to leave and are usually the first to exit and vote with their feet when circumstances deteriorate.”

What are the top priorities of the wealthy?
Steffen writes that “political stability, low taxation, and personal freedom have always been key metrics for millionaires when it comes to deciding where to live. However, the priorities of affluent individuals are shifting to the intangible but equally vital elements that impact; their children’s prospects, the quality of their lives, and the legacies they leave.”

He points out that apart from being a safe haven for wealth, security is also a key factor, “which is why so much private wealth is flowing into countries that offer a robust regulatory environment where the rule of law is respected, and economic freedoms are guaranteed.”

Comment by Riaz Haq on June 23, 2023 at 8:33pm
Don’t Believe Modi's Indian Economic Success Story

https://foreignpolicy.com/2023/06/23/modi-india-economy-success-story/

While campaigning for the U.S. presidency, Joe Biden sharply criticized the Modi government’s human rights record, writing how two of its landmark laws are “inconsistent with the country’s long tradition of secularism and with sustaining a multi-ethnic and multi-religious democracy.” Today, Indian Prime Minister Narendra Modi leads a country that is suddenly at the center of U.S. strategy in Asia. And Biden has changed his tune, inviting the prime minister to a state visit this week.

It’s widely understood that when U.S. elites refer to India having a functional free press, judiciary, and democracy, they are either dishonest or in denial about how the country’s political system has developed under Modi. But the same is true when they praise India’s economy. The U.S. government seems to be operating under the assumption that Modi’s India can sustain the country as it decouples from Chinese manufacturing. There is little reason to believe that is true.

Modi’s “Gujarat model” shot him to the prime ministry in 2014. As chief minister in Gujarat, he had led a developmentalist state: midwifing new industries, repairing bureaucracies, and making huge electricity and infrastructure investments. The state’s growth rate boomed as subsidies were given to politically connected conglomerates and to state-owned players.

But the model has failed when extended to the national stage. While Modi has succeeded in selling himself to his constituents and the world as India’s great modernizer, builder, and attractor of capital, the country’s growth under Modi has flagged. Heaps of praise from foreign India watchers might lead one to think otherwise. India’s boosters point to Modi’s “Make in India” 2014 electoral pledge to boost manufacturing to 25 percent of Indian GDP and his government’s all-in bet on capital investments in airports, along with roads and rail—11 percent of its 2023 budget—to create a larger internal market.
Comment by Riaz Haq on June 23, 2023 at 8:34pm
Don’t Believe Modi's Indian Economic Success Story

https://foreignpolicy.com/2023/06/23/modi-india-economy-success-story/

Though Modi promised to add 100 million manufacturing jobs, India actually lost 24 million of those jobs between 2017 and 2021. COVID-19 was only the last straw: 11 million jobs had already been lost before the pandemic hit, as state banks cloggedwith nonperforming assets followed by a shadow bank crisis led to a crunch in construction. In India, more people are out of work now than in 2011. Job prospects in cities are so dismal that agriculture now employs a greater share of workers than it did 5 years ago. In 2019, 12.5 million people applied for 35,000 railway jobs.

The failure to add manufacturing jobs is especially stark when India is compared with similar economies in Vietnam and Bangladesh. Both nations doubled their share of manufacturing employment between 2000 and 2020, while India’s share barely rose 2 percent. Now, Vietnam exports approximately the same value in manufactured goods with its 100 million people as does India with its 1.4 billion.

As for Modi’s bet on logistics and transport, it has largely failed to inspire domestic investment. Finance Minister Nirmala Sitharaman has pleadedwith Indian capitalists to invest in India, saying, “I want to hear from India Inc: what’s stopping you when countries and industries abroad think this is the place to be now?” Instead, they tend to offshore their profits and show a preference for financial assets.


Indian capitalists blame lack of demand for their refusal to invest. Modi’s crony capitalism has produced a massive upward distribution of wealth while failing to generate a middle-class consumer base large enough to entice investors to expand. Every index of private consumption of India’s vast working and middle class—sales of fast-moving consumer goods, two-wheelers, entry-level cars, even rail travel—has stagnated over the last decade, as Vivek Kaul has documented.

As the Economist reported, private investment in 2019-20 was only 22 percent of GDP, down from 31 percent in 2010-11. Investors also privately admitted to fearing Modi’s unstable and capricious use of tax authorities, which his government uses to punish political foes.

This is a development model that privileges huge, politically connected Indian incumbents—foreign firms have to seek partnerships with them to succeed. And contrary to its image of global economic openness, the government has also hikedtariffs on various goods—including goods from the United States, as highlighted by arguments over Harley Davidson during the courtship between Modi and the Trump administration.

Pollution also shortens life expectancy for 248 million residents of northern India by an estimated eight years. Cleaning up pollution reduces morbidity and increases people’s productivity, making it a vital investment in economic growth. In 2019, the Modi government declared a so-called war on pollution but allocated a scant $42 million to the effort. Modi simply will not take steps employed in countries around the world to fight pollution by taking on powerful opponents. In contrast, China’s war on pollution, launched in 2014, has significantly cleaned up its air. The Indian government has even gone so far as to label environmental activists in Greta Thunberg’s Fridays For Future organization as terrorists, arresting them under India’s draconian sedition laws.

Institutionalized sexism also severely hampersIndian economic growth. Female employment rates (ranging from formal work to self-employment to informal labor) have been dropping for over three decades, with only 7 out of 100 urban women now employed, placing the nation behind even Saudi Arabia in terms of female labor participation. The Modi government’s low funding of the Mahatma Gandhi National Rural Employment Guarantee Act in 2023 further hurts working women; conversely, boosting rural employment and creating urban employment guarantee schemes would be an easy growth (and electoral) win.
Comment by Riaz Haq on June 23, 2023 at 8:36pm
Don’t Believe Modi's Indian Economic Success Story

https://foreignpolicy.com/2023/06/23/modi-india-economy-success-story/

Modi’s deft use of direct benefit programs—such as the installation of toilets in homes, electricity hookups, and distribution of cooking gas—has certainly improved his citizen’s lives. While these programs do little to redistribute wealth or change India’s economic trajectory, the tangibility of these home-based benefits has redounded to Modi’s personal popularity and helps to explain his slight electoral edge with women.

But these programs, together with Modi’s Hindu nationalist stunts—such as the construction of a massive Hindu temple on the remains of an ancient mosque, which was destroyed by Hindu nationalist mobs in 1992—also help to distract his supporters from his government’s myriad failures. This combination of institutionalized anti-minority violence, authoritarian crackdowns on free press and critics, youth unemployment, and soaring inequality, is explosive in Modi’s India.

Modi’s Gujarat model of using capital-intensive infrastructure as a primary engine for growth has derailed—even for Gujarat. India is now stuck in a jobless growth trap that prioritizes capital but generates low labor participation and low human capital. As the economist R. Nagaraj concludes, “Never in the past seven decades has India witnessed such an economic reversal, and the gravity of the problem is perhaps yet to sink into the minds of policymakers and the public.”
Comment by Riaz Haq on July 17, 2023 at 4:47pm

One-tenth of India's population escaped poverty in 5 years - government report
By Manoj Kumar

https://www.reuters.com/world/india/one-tenth-indias-population-esc...


NEW DELHI, July 17 (Reuters) - Nearly 135 million people, around 10% of India's population, escaped poverty in the five years to March 2021, a government report found on Monday.

Rural areas saw the strongest fall in poverty, according to the study, which used the United Nations' Multidimensional Poverty Index (MPI), based on 12 indicators such as malnutrition, education and sanitation. If people are deprived in three or more areas, they are identified as "MPI poor."

"Improvements in nutrition, years of schooling, sanitation and cooking fuel played a significant role in bringing down poverty," said Suman Bery, vice-chairman of the NITI Aayog, the government think-tank that released the report.

The percentage of the population living in poverty fell to 15% in 2019-21 from 25% in 2015/16, according to the report, which was based on the 2019-21 National Family Health Survey.

A report by the United Nations Development Programme (UNDP) released last week said the number of people living in multidimensional poverty fell to 16.4% of India's population in 2021 from 55% in 2005.

According to UNDP estimates, the number of people, who lived below the $2.15 per day poverty line had declined to 10% in India in 2021.

India's federal government offers free food grain to about 800 million people, about 57% of country's 1.4 billion population, while states spend billions of dollars on subsidising education, health, electricity and other services.

The state that saw the largest number moving out of poverty was Uttar Pradesh, with 343 million people, followed by the states of Bihar and Madhya Pradesh, according to the report.

Reporting by Manoj Kumar; Editing by Conor Humphries

Comment by Riaz Haq on July 29, 2023 at 4:40pm

Unhappy With Data Sets,' Modi Govt Suspends Director of Institute Which Prepares NFHS

See how BJP manipulates data — gives fake reality
Modi suspends Director of Institute that said:
1. India was nowhere close to being open defecation free.
2. 40% households did not have access to clean cooking fuel
3. Anaemia in India is on the rise .

https://twitter.com/jawharsircar/status/1685208148104396800?s=20


---------------

The Union government has been known for its very uneasy relationship with data. It has missed a deadline for the decadal Census. Its handling of Consumption Expenditure series and then the timing of the release of unemployment data has been strongly criticised in the past.


https://thewire.in/government/ks-james-nfhs-modi-government-data-se...

New Delhi: In an unprecedented move, the Union government has suspended the director of the International Institute for Population Sciences, K.S. James, citing an irregularity in recruitment, sources have told The Wire.

The International Institute for Population Sciences or IIPS prepares the National Family Health Surveys and does other such important exercises on the behalf of the Indian government. The IIPS comes under the Union health ministry.

The Wire reached out to the ministry but has not received a response yet. The story will be updated as and when the ministry responds.

However, an IIPS source at the department of public health and mortality studies has confirmed to The Wire that a suspension letter has been issued and that further details would come on Monday.

Sources told The Wire that James had been asked by the government to resign earlier as the government was not happy with certain data sets that came up in the surveys conducted by the IIPS.

However, he was reluctant to step down for reasons being given, they said.

he letter of suspension was sent to James on the evening of July 28, today.

nconvenient data?

For a government that believes in strong and ‘positive’ data, to work in tandem with its political campaign for electoral victories, the NFHS-5 had thrown up several data sets inconvenient for the government.

For example, it showed that India was nowhere close to being open defecation free – a claim that this government, including the Prime Minister, Narendra Modi, often makes. Nineteen percent of households do not use any toilet facility, meaning that they practice open defecation, the NFHS-5 had pointed out. There is not a single state or Union Territory, except for Lakshadweep, where 100% of the population has access to a toilet, it had said.

The NFHS-5 had also showed that more than 40% households did not have access to clean cooking fuel – thus questioning the claims of success of the Ujjwala Yojana. It said in rural areas, more than half the population, 57%, does not have access to LPG or natural gas.

The NFHS-5 had also said anaemia in India was on the rise, and there have been some recent reports that the government was mulling to drop the anaemia measurement for NFHS-6.

Recently, a member of the Prime Minister’s Economic Advisory Council, Shamika Ravi, had written an op-ed in the Indian Express claiming that data collection for NFHS and other such surveys was flawed. Her article was criticised in another op-ed by Amitabh Kundu and P.C. Mohanan, published in the newspaper.

James was appointed the director of the Mumbai-based institute in 2018. He has a postdoctoral degree from Harvard Centre for Population and Development. Prior to joining the IIPS, he was professor of population studies at the Jawaharlal Nehru University, New Delhi, and has held a couple of leadership positions.

Comment by Riaz Haq on July 29, 2023 at 5:55pm

India's impressive GDP data has some puzzling elements


https://www.moneycontrol.com/europe/?url=https://www.moneycontrol.c...


Tepid consumption

After posting year-on-year growth of 2.2 percent in October-December, private final consumption expenditure did pick up some pace in January-March, but only to 2.8 percent. According to Rahul Bajoria, managing director and head of emerging markets Asia (ex-China) economics at Barclays, the rise in private consumption "appears weaker" than what high-frequency indicators suggest.

Further, this weakness "does not reconcile with the robust value-added growth of consumption-led sectors like Trade, Hotels, Transport and Communication services", Madhavi Arora, lead economist at Emkay Global Financial Services, said in a note.

The 'Trade, Hotels, Transport, Communication, and Services related to broadcasting' segment posted gross value added (GVA) growth of 9.1 percent in January-March, second only to the 10.4 percent expansion reported by construction.

GDP-GVA divide

If GDP growth sharply surprised on the upside, GVA growth outperformed even that, coming in at 6.5 percent in January-March.

GDP is the sum of GVA and indirect taxes, net of subsidies. As such, higher GVA growth is suggestive of a contraction in net indirect taxes.

However, the latest data from the Controller General of Accounts (CGA) shows the Centre's expenditure on major subsidies was Rs 1.8 lakh crore in January-March—up only 3 percent compared to the same quarter last year. Meanwhile, indirect tax collections increased by 7.3 percent over the same period. On a net basis, indirect taxes were 6 percent higher last quarter. It is only if Integrated Goods and Services Tax collections are excluded that the indirect tax mop-up is lower by 1.4 percent in January-March on a year-on-year basis.

Rising discrepancies

A curious subhead of the GDP data is 'discrepancies', used to explain any difference between the GDP calculated through the income and expenditure methods.

In January-March, the discrepancies amounted to a negative Rs 1.28 lakh crore, implying that the GDP arrived at from the expenditure side is greater than that from the income side. Whether this is indicative of demand being overestimated is anybody's guess.

What can be said without uncertainty is that the size of discrepancies, whether negative or positive, is rising, with its absolute value now at a six-quarter high. This leaves plenty of room for future revisions in the headline GDP growth number.

Constant revisions

This conveniently brings us to where we started: How did all economists not read it right?

"The reason everybody got this wrong is the alarming regularity with which the data is getting revised," noted Kunal Kundu, India economist at Societe Generale.

"The release of October-December data saw a revision of data for the previous quarters over the past three years. The latest release once again saw a revision of recently revised quarterly data, making forecasting a rather hazardous task," Kundu added.

Constant revisions have indeed been the bane for policymakers as well as economists. After data for October-December, released in February, showed weak private consumption growth in the quarter, V Anantha Nageswaran, the chief economic adviser to the government, was at pains to point out that "data revision to the prior years has made a 6 percent growth rate come down to 2 percent".

Comment by Riaz Haq on September 23, 2023 at 8:16pm

The poverty in Pakistan increased within one year from 34.2% to 39.4% with 12.5 million more people falling below the poverty line of $3.65 per day income level, according to the WB.

https://tribune.com.pk/story/2437352/95m-pakistanis-live-in-poverty...

---------

According to the World Bank, over 40% of India's population lives in moderate poverty, which is defined as $3.65 per person per day. This is one of the fastest-growing major economies in the world, with real GDP growth of 7.7% in Q1-Q3 FY22/23.


https://thedocs.worldbank.org/en/doc/5d1783db09a0e09d15bbcea8ef0cec...

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