Multidimensional Poverty Reduction in India: State-wise Progress from Economic Survey 2025-26
India has made remarkable progress in reducing multidimensional poverty over the past decade, lifting millions out of deprivation across multiple dimensions of wellbeing. The Economic Survey 2025-26 discusses this achievement as part of its broader analysis of social development and inclusive growth. This article examines India's multidimensional poverty trends, state-wise variations, and the policy interventions driving this progress.
Understanding Multidimensional Poverty
Traditional poverty measurement relies primarily on income or consumption thresholds, classifying households as poor if their income falls below a specified poverty line. While useful, this approach misses important dimensions of deprivation that affect quality of life.
The Multidimensional Poverty Index (MPI), developed by the Oxford Poverty and Human Development Initiative and the United Nations Development Programme, takes a broader view. It identifies poverty across three equally weighted dimensions: health, education, and living standards.
Within health, indicators include nutrition and child mortality. Within education, indicators cover years of schooling and school attendance. Within living standards, indicators assess cooking fuel, sanitation, drinking water, electricity, housing quality, and assets.
A household is considered multidimensionally poor if it is deprived in at least one-third of these weighted indicators. This threshold captures households experiencing significant deprivation even if they might not be income-poor by conventional measures.
India began computing its own national MPI from 2021, using National Family Health Survey data and adding indicators relevant to the Indian context. This national MPI provides granular data at the state and district level, enabling targeted policy interventions.
India's MPI Progress: The Numbers
The Economic Survey 2025-26 documents substantial progress in reducing multidimensional poverty. According to the latest data, approximately 248 million people were lifted out of multidimensional poverty between 2013-14 and 2022-23, representing one of the largest poverty reduction achievements globally.
The headcount ratio of multidimensional poverty declined from about 29.17 per cent in 2013-14 to around 11.28 per cent in 2022-23. This means the share of population experiencing multidimensional deprivation more than halved in less than a decade.
The intensity of poverty, measuring the average share of deprivations among the poor, also declined. This indicates that not only are fewer people poor, but those who remain poor are experiencing fewer simultaneous deprivations than before.
The MPI value, which combines headcount and intensity, showed corresponding improvement. India moved from the category of countries with high multidimensional poverty to those with medium poverty, a significant advancement in global rankings.
State-wise Variation in Progress
The Economic Survey 2025-26 discusses progress in state-wise incidence of multidimensional poverty, highlighting both achievements and remaining challenges. Indian states display significant variation in poverty levels and the pace of poverty reduction.
States with historically high poverty rates have shown some of the fastest improvement. Bihar, which had among the highest MPI values, achieved substantial reduction in its headcount ratio. Jharkhand, Uttar Pradesh, and Madhya Pradesh also demonstrated significant progress.
This pattern of faster improvement in initially poorer states suggests convergence in multidimensional development across India. The gap between the best and worst-performing states has narrowed, even as all states have improved.
Southern and western states that already had lower poverty rates have maintained their advantage while continuing to reduce residual deprivation. Kerala, Tamil Nadu, Punjab, and Goa have MPI values approaching those of upper-middle-income countries.
However, significant absolute poverty remains concentrated in certain states. The large-population states of Uttar Pradesh, Bihar, and Madhya Pradesh still account for a substantial share of India's multidimensionally poor, given their population size even at reduced headcount ratios.
Urban-Rural Gaps
The Economic Survey 2025-26 discusses urban-rural gaps in various development indicators, which are particularly relevant for multidimensional poverty. Rural areas historically had higher poverty rates due to lower access to services and infrastructure.
The urban-rural gap in multidimensional poverty has narrowed but remains significant. Rural MPI values are typically two to three times higher than urban values within the same state. This reflects ongoing disparities in access to education, healthcare, sanitation, and other services.
However, rural improvement has been faster than urban improvement in many states, reflecting the impact of rural-focused schemes. Programmes like Swachh Bharat Mission for sanitation, Jal Jeevan Mission for drinking water, and Saubhagya for electricity have directly addressed deprivations included in the MPI.
The remaining rural-urban gap suggests continued need for rural-focused investments. The survey's discussion of infrastructure development, including roads, electricity, and digital connectivity, addresses constraints that affect rural poverty.
Key Indicators Driving Improvement
Examining which MPI indicators have improved most reveals the pathways of poverty reduction. The Economic Survey 2025-26 discusses several areas of progress relevant to the MPI dimensions.
Sanitation access has improved dramatically following the Swachh Bharat Mission. The share of households with access to improved sanitation facilities increased from about 40 per cent in 2014 to over 95 per cent by 2024. This single indicator contributed significantly to MPI reduction.
Cooking fuel access has improved with the Ujjwala scheme providing LPG connections to poor households. Replacing biomass cooking with clean fuel reduces indoor air pollution deaths and improves health outcomes while reducing deprivation on this indicator.
Electricity access reached near-universal levels through Saubhagya and earlier electrification programmes. Lighting enables children to study and creates opportunities for productive activities and information access.
Drinking water access has improved through Jal Jeevan Mission, which aims to provide piped water connections to all rural households. Progress on this indicator has been substantial, though some states lag behind the national average.
Education indicators have shown improvement with increased school enrollment and completion rates. The Right to Education Act and various educational initiatives have increased years of schooling across the population.
Nutrition indicators have shown slower improvement than other dimensions. Child stunting and wasting remain concerns despite overall progress. The survey discusses child nutrition gaps as an ongoing challenge requiring attention.
Policy Interventions Behind the Progress
India's multidimensional poverty reduction reflects the cumulative impact of multiple policy interventions rather than any single programme. The Economic Survey 2025-26 discusses several relevant schemes.
Direct benefit transfer programmes have improved targeting efficiency. By transferring benefits directly to beneficiary accounts, leakages that historically plagued subsidy delivery have been reduced. The survey notes significant efficiency gains across major schemes including PDS, MGNREGA, and PM-KISAN.
Infrastructure investments have improved access to services that directly affect MPI indicators. Roads enable access to healthcare and markets. Digital infrastructure enables financial inclusion and information access. Power infrastructure enables productive activities.
Health interventions through Ayushman Bharat and various maternal and child health programmes have improved health outcomes. The expansion of health insurance coverage provides financial protection against health shocks that can push households into poverty.
Education initiatives have increased enrollment and retention. Mid-day meal schemes improve nutrition while incentivizing attendance. Scholarships and fee waivers enable poor households to keep children in school longer.
Financial inclusion through Jan Dhan accounts has integrated poor households into the formal financial system, enabling savings and access to credit. The survey notes that sharp narrowing of gaps in financial access between rich and poor occurred over the past decade.
Remaining Challenges
Despite significant progress, the Economic Survey 2025-26 implicitly acknowledges remaining challenges in poverty reduction. About 11 per cent of the population remains multidimensionally poor, representing over 150 million people.
Nutrition deprivation has proven more resistant to improvement than other indicators. Child stunting affects about 35 per cent of children under five, limiting their physical and cognitive development. Addressing this requires not just food availability but dietary diversity, care practices, and healthcare access.
Quality of services often lags quantity of access. A household may have electricity but face frequent outages. A child may be enrolled in school but receive poor-quality education. Improving service quality is the next frontier after achieving basic access.
The urban poor require different interventions than the rural poor. Urban poverty often involves informal housing, precarious employment, and exclusion from services designed for documented residents. Urban-focused poverty strategies are less developed than rural programmes.
Climate change threatens to reverse gains by affecting agricultural incomes, water availability, and health. The survey's discussion of climate resilience is relevant to protecting poverty reduction achievements.
The Aspirational Districts Programme
The Aspirational Districts Programme, launched in 2018, has specifically targeted districts with the highest levels of deprivation across health, education, agriculture, and infrastructure. The Economic Survey 2025-26's discussion of regional development touches on such targeted approaches.
The programme uses real-time data dashboards to monitor progress on key indicators. District administrators are ranked and compared, creating competitive pressure for improvement. Best practices from high-performing districts are shared and replicated.
Many aspirational districts have shown faster improvement than the national average, contributing to the convergence pattern observed in MPI data. Targeted resources and administrative attention have accelerated progress in previously neglected areas.
Measuring Progress: Data Infrastructure
Accurate measurement of multidimensional poverty requires robust data infrastructure. The Economic Survey 2025-26 discusses improvements in India's statistical systems that enable better monitoring of poverty and development indicators.
The National Family Health Survey (NFHS) provides the primary data source for India's national MPI. Improvements in survey methodology, geotagging, and faster data processing have enhanced data quality and timeliness. Survey reports are now released within 45 to 90 days, enabling more responsive policymaking.
Administrative data from scheme implementations provide complementary information. The number of LPG connections, toilet constructions, and water connections can be tracked in real time rather than waiting for periodic surveys.
The challenge is integrating data from multiple sources to create a complete picture of household-level deprivation. Efforts to link databases and create unified beneficiary registries support more targeted and effective interventions.
UPSC Relevance: Poverty and Social Development
Poverty reduction is a core UPSC topic spanning multiple papers:
- GS-I: Social issues, population, poverty
- GS-II: Welfare schemes, social justice
- GS-III: Economic development, inclusive growth
- Essay: Development, inequality, social progress
Practice MCQs on Multidimensional Poverty - Economic Survey 2025-26
Q1. The Multidimensional Poverty Index measures deprivation across:
(a) Two dimensions: income and assets
(b) Three dimensions: health, education, living standards
(c) Four dimensions: income, health, education, employment
(d) Five dimensions: income, health, education, housing, employment
Answer: (b) Three dimensions: health, education, and living standards
Q2. According to recent data discussed in Economic Survey 2025-26, approximately how many people were lifted out of multidimensional poverty between 2013-14 and 2022-23?
(a) 100 million
(b) 150 million
(c) 248 million
(d) 350 million
Answer: (c) 248 million people
Q3. Which MPI indicator has shown the most improvement in recent years?
(a) Child nutrition
(b) Years of schooling
(c) Sanitation access
(d) Asset ownership
Answer: (c) Sanitation access, following Swachh Bharat Mission
Q4. The pattern of faster improvement in initially poorer states suggests:
(a) Divergence across states
(b) Convergence across states
(c) No relationship
(d) Regional specialization
Answer: (b) Convergence across states in multidimensional development
Q5. A household is classified as multidimensionally poor if deprived in at least:
(a) One-quarter of weighted indicators
(b) One-third of weighted indicators
(c) One-half of weighted indicators
(d) Two-thirds of weighted indicators
Answer: (b) One-third of weighted indicators
Conclusion
India's progress in reducing multidimensional poverty represents one of the most significant development achievements of the past decade, as the Economic Survey 2025-26 documents. The decline from 29 per cent to 11 per cent in headcount ratio, lifting 248 million people out of deprivation, reflects the cumulative impact of multiple policy interventions across health, education, and living standards. The convergence pattern across states suggests that targeted efforts in lagging regions can accelerate progress. However, remaining challenges in nutrition, service quality, and urban poverty require continued attention. For UPSC aspirants, understanding multidimensional poverty measurement and the policies driving its reduction is essential for comprehensive answers on social development and inclusive growth.