The NITI Aayog’s report on Multi-dimensional Poverty (MDP), which says that headcount poverty has fallen from 29.17 per cent in 2013-14 to 11.28 per cent in 2018-19, must be taken with a pinch of salt. The reasons for this are quite plain.

First, its assessment of MDP is based on three indicators apiece of health and education and six around living standards, but none whatsoever that directly deals with income. Going even by the lineage of studies that this government has cited approvingly in support of its poverty reduction claims, such as the IMF study (April 2022) by Surjit Bhalla, Karan Bhasin and Arvind Virmani, this assessment does seem ambitious. The Bhalla et al estimate of 0.8 per cent income poverty (those below $1.9 PPP per day) takes into account the important role played by State domestic product, while arguing that free transfers arrested the rise in poverty during the pandemic.

The NITI paper pushes the free transfers thesis, but estimates stunning poverty reduction in the backward northern and central States, even as their growth has been moderate over the last decade vis-a-vis the rest. Has poverty reduction been decoupled from growth, and have these States been transformed into another Sri Lanka?

Central schemes such as Jan Dhan Yojana and Garib Kalyan Yojana may well have prevented people from sliding into dire poverty. But the fact that northern States have remained laggards in socio-economic indices suggests that their governance is not exceptional. Has this changed? State-level schemes too may have had a positive effect. Yet, the NITI paper refers to the Centrally sponsored schemes, even as some of these are funded by the Centre and States.

The paper must explain its yardsticks for deprivation to convince the critics.