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UPSC Prelims 2026Question 100Economy

Consider the following statements about Multidimensional Poverty Index (MPI):
1. MPI is calculated using Alkire-Foster methodology.
2. MPI calculated by NITI Aayog has a total of twelve indicators.
3. Maternal Health and Bank Account are common indicators in the MPI of NITI Aayog and MPI of United Nations Development Programme (UNDP).
Which of the statements given above is/are correct ?

Options

  1. (a)1 and 2 only
  2. (b)1, 2 and 3
  3. (c)1 and 3 only
  4. (d)2 only
Correct answer: a
Decision rule

India's National MPI is the global ten indicators plus two national additions - maternal health and a bank account - so those two are never common.

Explanation

Correct Answer

(a) 1 and 2 only

Explanation of the Correct Answer

Statement 1 is correct

  • The Multidimensional Poverty Index (MPI) is calculated using the Alkire-Foster methodology.
  • This methodology measures poverty by identifying multiple simultaneous deprivations across dimensions such as health, education, and standard of living. United Nations Development Programme (UNDP) notes that the global MPI was developed by OPHI and UNDP and uses multidimensional indicators to measure acute poverty.

Statement 2 is correct

  • The National MPI calculated by NITI Aayog has 12 indicators.
  • It retains the 10 indicators of the Global MPI and adds two India-specific indicators:
    • Maternal Health
    • Bank Account

The NITI Aayog report states that India’s National MPI uses the Alkire-Foster methodology and includes 12 indicators. (NITI AAYOG)

Statement 3 is incorrect

  • Maternal Health and Bank Account are not common indicators in NITI Aayog’s MPI and UNDP’s Global MPI.
  • They are additional indicators included in India’s National MPI by NITI Aayog.
  • The Global MPI has 10 indicators, while India’s National MPI has 12 indicators by adding these two.

Therefore, only statements 1 and 2 are correct.

Why Other Options Are Incorrect

OptionVerdictExplanation
(a) 1 and 2 onlyCorrectMPI uses Alkire-Foster methodology, and NITI Aayog’s National MPI has 12 indicators. Maternal Health and Bank Account are not common with UNDP’s Global MPI.
(b) 1, 2 and 3IncorrectStatement 3 is incorrect because Maternal Health and Bank Account are added by NITI Aayog and are not part of UNDP’s Global MPI indicators.
(c) 1 and 3 onlyIncorrectStatement 2 is correct, but Statement 3 is incorrect.
(d) 2 onlyIncorrectStatement 1 is also correct because MPI is based on Alkire-Foster methodology.

Relevant Supplementary Information

NITI Aayog National MPI vs UNDP Global MPI

BasisNITI Aayog National MPIUNDP Global MPI
MethodologyAlkire-Foster methodologyAlkire-Foster methodology
Main dimensionsHealth, Education, Standard of LivingHealth, Education, Standard of Living
Number of indicators1210
Additional indicators in India’s MPIMaternal Health, Bank AccountNot included
PurposeMeasures multidimensional poverty in India with national prioritiesMeasures acute multidimensional poverty across countries
Institutional associationNITI AayogUNDP and OPHI
BasisNITI Aayog National MPIUNDP Global MPI
MethodologyAlkire-Foster methodologyAlkire-Foster methodology
DimensionsHealth, Education, Standard of LivingHealth, Education, Standard of Living
Number of indicators1210
PurposeMeasures multidimensional poverty within IndiaMeasures acute multidimensional poverty across countries
Extra indicatorsMaternal Health, Bank AccountNot included
UsefulnessTracks national and state-level welfare outcomesEnables international comparison
Institutional associationNITI AayogUNDP and OPHI

Indicators in NITI Aayog National MPI

DimensionIndicatorsNumber of Indicators
HealthNutrition, Child and Adolescent Mortality, Maternal Health3
EducationYears of Schooling, School Attendance2
Standard of LivingCooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets, Bank Account7
Total12 indicators12

Indicators in UNDP Global MPI

DimensionIndicatorsNumber of Indicators
HealthNutrition, Child Mortality2
EducationYears of Schooling, School Attendance2
Standard of LivingCooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets6
Total10 indicators10

Key Takeaways from the Tables

PointExplanation
MPI uses Alkire-Foster methodologyThis is common to both Global MPI and India’s National MPI.
NITI Aayog MPI has 12 indicatorsIt includes the 10 global indicators plus 2 India-specific indicators.
UNDP Global MPI has 10 indicatorsIt does not include Maternal Health and Bank Account.
Maternal Health and Bank Account are India-specific additionsThey are not common indicators between the two MPIs.
Correct answer is 1 and 2 onlyStatement 3 is the trap.
PointExplanation
MPI is broader than income povertyIt captures deprivation in health, education, and living standards.
Alkire-Foster methodology is centralBoth Global MPI and India’s National MPI use this methodology.
Global MPI has 10 indicatorsThese are spread across three dimensions.
NITI Aayog MPI has 12 indicatorsIt adds Maternal Health and Bank Account to the 10 global indicators.
Maternal Health and Bank Account are not common indicatorsThey are India-specific additions in the National MPI.
Main memory ruleGlobal MPI = 10 indicators; NITI MPI = 12 indicators.

Context and Current Relevance

  • MPI is important because it measures poverty beyond income by including health, education, and living standards.
  • India’s National MPI adds Maternal Health and Bank Account to reflect national priorities such as maternal care and financial inclusion.
  • This makes it more suitable for tracking welfare outcomes linked to schemes such as nutrition, sanitation, electricity, housing, health, and financial inclusion.

Table: Multidimensional Poverty Index — Key Facts

ParameterDetails
Full formMultidimensional Poverty Index
Short formMPI
MethodologyAlkire-Foster methodology
Developed byOxford Poverty and Human Development Initiative and UNDP for Global MPI
Indian version published byNITI Aayog
Core ideaMeasures poverty through multiple deprivations, not just income
Main dimensionsHealth, Education, Standard of Living
Global MPI indicators10 indicators
NITI Aayog National MPI indicators12 indicators
India-specific additionsMaternal Health and Bank Account

Table: Common and Different Indicators

IndicatorNITI Aayog National MPIUNDP Global MPIStatus
NutritionIncludedIncludedCommon
Child Mortality / Child and Adolescent MortalityIncludedIncludedBroadly common
Years of SchoolingIncludedIncludedCommon
School AttendanceIncludedIncludedCommon
Cooking FuelIncludedIncludedCommon
SanitationIncludedIncludedCommon
Drinking WaterIncludedIncludedCommon
ElectricityIncludedIncludedCommon
HousingIncludedIncludedCommon
AssetsIncludedIncludedCommon
Maternal HealthIncludedNot includedIndia-specific addition
Bank AccountIncludedNot includedIndia-specific addition

Table: Alkire-Foster Methodology — Basic Idea

ConceptMeaning
Multiple deprivationsPoverty is measured through several dimensions, not only income
Deprivation cut-offMinimum standard used to decide whether a household is deprived in an indicator
Poverty cut-offThreshold used to decide whether a person is multidimensionally poor
Headcount ratioProportion of people who are multidimensionally poor
Intensity of povertyAverage share of deprivations suffered by poor people
MPI valueCombines incidence and intensity of poverty

Table: Common Exam Traps Related to MPI

Statement / TrapCorrect Understanding
MPI measures poverty only through incomeIncorrect. It measures multiple deprivations.
MPI uses Alkire-Foster methodologyCorrect.
NITI Aayog National MPI has 10 indicatorsIncorrect. It has 12 indicators.
UNDP Global MPI has 10 indicatorsCorrect.
Maternal Health is part of UNDP Global MPIIncorrect. It is India-specific in NITI Aayog MPI.
Bank Account is part of UNDP Global MPIIncorrect. It is India-specific in NITI Aayog MPI.
Health, Education and Standard of Living are the three dimensionsCorrect.
Maternal Health and Bank Account are common to both indicesIncorrect. They are additional indicators in India’s National MPI.
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