Mains Practice Questions

Approach

• Write an introduction about the monetary measures and poverty assessment.
• Mention the advantages of the multidimensional approach in assessment of poverty.
• Write a conclusion.

Introduction

Poverty is a complex phenomenon that affects different aspects of people’s lives. Measuring poverty based on income or consumption alone may not capture the full extent and intensity of people’s deprivations.

Body

Monetary measures like income or consumption are widely used to assess poverty, but they have several limitations:

• Narrow Focus: They only capture one aspect of poverty - financial resources. But poverty is multidimensional, encompassing a lack of access to healthcare, education, sanitation, social support, and other essentials.
• Arbitrary Lines: Poverty lines are set based on assumptions and comparisons within a specific context. This can overlook significant deprivation experienced by groups outside the line or fail to capture differences in the cost of living across regions.
• Household Unit Bias: They assess poverty at the household level, assuming equal resource distribution within. This ignores individual disparities, especially the vulnerability of women, children, and elderly within households.
• Static Picture: Monetary measures provide a snapshot in time, often failing to capture the dynamic nature of poverty and its cyclical impact on individuals and communities.
• Difficulty Accounting for Subsistence Economies: Monetary measures struggle to capture poverty in traditional economies where bartering and self-sufficiency play a significant role.
• Neglects Social Exclusion: The focus on income overlooks the social dimension of poverty, including discrimination, lack of voice, and limited access to opportunities.

Advantages of a Multidimensional Approach:

In contrast, a multidimensional approach offers a more holistic understanding of poverty:

• Broader Scope: It considers multiple dimensions like health, education, sanitation, and living standards, providing a more nuanced picture of deprivation.
• Capturing Vulnerability: It identifies individuals and groups at risk of falling into poverty based on various deprivations, allowing for targeted interventions.
• Recognizing Diversity: It acknowledges the heterogeneity of poverty across regions, contexts, and social groups, leading to more equitable policy solutions.
• Dynamic Understanding: It tracks changes in various dimensions over time, capturing the complex and evolving nature of poverty.
• Addressing Social Exclusion: It considers social and political factors contributing to poverty, leading to solutions beyond just income generation.

Examples of Multidimensional Measures:

• One example of a multidimensional approach to poverty is the Multidimensional Poverty Index (MPI), which uses 10 indicators covering three main areas: health, education, and living standards.
• The MPI can be adapted to different contexts and countries by adding or modifying indicators according to their relevance and availability.
  • For instance, India has added two new indicators to its National MPI: maternal health and bank accounts.
• The MPI can help policymakers and practitioners to identify the most deprived regions and groups, allocate resources more efficiently, and track the changes in poverty over time

Conclusion

While monetary measures have their place, relying solely on them can paint an incomplete picture of poverty. A multidimensional approach, by considering various aspects of deprivation and vulnerability, provides a more comprehensive understanding of poverty and guides the development of effective interventions to address its true complexity.