Developed by the Oxford Poverty and Human Development Initiative (OPHI) for the United Nations Development Programmes (UNDP) forthcoming 2010 Human Development Report, the MPI attempts to capture more than just income poverty at the household level. It is composed of ten indicators: years of schooling and child enrollment (education); child mortality and nutrition (health); and electricity, flooring, drinking water, sanitation, cooking fuel and assets (standard of living). Each education and health indicator has a 1/6 weight, each standard of living indicator a 1/18 weight.
The new data also shows that even in states generally perceived as prosperous such as Haryana, Gujarat and Karnataka, more than 40% of the population is poor by the new composite measure, while Kerala is the only state in which the poor constitute less than 20%. The MPI measures both the incidence of poverty and its intensity. A person is defined as poor if he or she is deprived on at least 3 of the 10 indicators. By this definition, 55% of India was poor, close to double India's much-criticised official poverty figure of 29%. Almost 20% of Indians are deprived on 6 of the 10 indicators.
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. In fact, the contribution of nutrition to the overall MPI is even greater in urban than rural India.
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 MP far exceeds that in the DRC. Nutritional deprivation contributes to almost 20% of MP'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.
Multi-dimensional poverty is highest (81.4% poor) among Scheduled Tribes within India's Hindu population, followed by Scheduled Castes (65.8%), Other Backward Class (58.3%) and finally the general population (33.3%).
There is significant variation between the poverty incidence in various states as per the MPI and as per the Indian Planning Commission's official figures. Based on the MPI, Bihar has by far the most poor 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 state of Uttar Pradesh.
As per the Planning Commission's figures, 41.4% of Bihar and 32.8% of UP is poor. In a possible indication of inadequate access to health and education facilities which do not show up in income poverty, almost 60% of north-east India and close to 50% of Jammu & Kashmir are poor as per the MPI, while the Planning Commission figures are around 16% and 5% respectively.
The findings would provide further ballast to the argument of some economists that India's official poverty estimation methods are too narrowly focused to capture the real extent of deprivation in the country.