Domestic Index Crafted to Counter UN’s Poverty Statistics, It Says

December 19, 2024

In the months leading up to the 2024 Lok Sabha elections, the ruling party claimed that nearly 250 million people had emerged from poverty during the 10 years of its government. However, an investigation by The Reporters’ Collective shows that the figure was the culmination of discreet efforts by an inter-ministerial unit to counter India’s global rankings.

The key objective of the dedicated inter-ministerial unit, called the Global Indices for Reform and Growth (GIRG), was to counter global rankings and measures that cast India’s progress in a less favourable light, particularly the United Nations’ Multidimensional Poverty Index, according to The Reporters’ Collective.

Here is an abridged and paraphrased version of the details provided in the report:

GIRG was formed in 2020 under the then cabinet secretary Rajiv Gauba to monitor 30 global indices, ranging from those measuring democratic health to the state of nutrition. Its purpose was twofold: to either push international publishers to modify their methodologies so that India’s rankings would improve, or to create and promote a domestically crafted alternative that produced more flattering statistics.

The national multidimensional poverty index (MPI) that ultimately formed the basis of the government’s claim was one such domestically crafted alternative.

A senior advisor at NITI Aayog — the country’s top government think tank —admitted that the UN’s Multidimensional Poverty Index was among the 30 indices being monitored and challenged. The government took offense to the poor light it shed on India and decided that simply complaining about the international measure was insufficient. Instead, the plan was to create a parallel index that would ensure a triumph by design.

Internal “confidential” documents justify the creation of a national MPI on the grounds that the government would have total control over selecting parameters and computing results. Having ownership meant choosing favourable dimensions, indicators and weights that would portray achievements like widespread bank account access while downplaying stubborn problems like poor child nutrition and health.

The effort was tailored to produce a predetermined outcome. As early as 2020, three years before the national MPI data was compiled and long before the framework was finalised, officials agreed that the new index should show a substantial reduction in poverty.

By the time the first national index was published in 2021, it performed just as expected. Drawing on the 2015-16 National Family Health Survey (NFHS-4), the government’s index placed the poverty level at 25.01%, nearly 3% lower than the global MPI’s figure for the same reference period. Though both indices relied on the same survey, India’s version had more indicators – 12 instead of 10 – and added parameters like “maternal health” and universal financial inclusion through bank accounts. These carefully selected and weighted indicators reduced the impact of negative parameters like child nutrition and mortality, areas where India lags behind. This reshuffling and expansion ensured a lower overall poverty figure.

By the time the 2023 report was released, the government’s selective approach had paid further dividends. The new national MPI, based on NFHS-5 data from 2019-21, claimed that between 2015-16 and 2019-21, 135 million people had moved out of poverty.

Economists quickly noted that the figure was inflated since the government did not account for population growth over this period and used the same population base for both years. Correcting for this oversight would reduce the number by about 17 million. However, these technical objections did not stop the government from going further. In January 2024, NITI Aayog published a paper extending this trend backward to 2013-14 and forward to 2022-23, all without direct survey data for those interim years. The result was a lavish claim that 249 million people escaped poverty in the decade of the Bharatiya Janata Party’s governance.

A key driver of this rosy statistic was a parameter that nearly everyone scored well on: bank accounts. The proportion of Indians without bank accounts plummeted from 58% in 2013-14 to just 3.69% according to the new estimates. This single parameter, heavily influenced by the Jan Dhan Yojana scheme, was enough to tilt the poverty index significantly, even as health and nutrition indicators continued to be a genuine challenge. In fact, in its rush to claim credit, NITI Aayog officials even attributed improvements to interventions like the Anaemia Mukt Bharat Mission, despite the fact that anaemia was not tracked by the government’s MPI at all.