Using Multidimensional Poverty Measure to Target Right Beneficiaries to Achieve Sustainable Development Goal-1 in India

Abstract

Shocks are responsible for significant setbacks in development progress because it persistently inflicts a negative impact on livelihood. As a result, those who are poor continue to be poor, and those who are not poor become vulnerable to falling into poverty. The analysis of the link between risks and vulnerability to poverty in developing countries is a major focus of development policy to ensure the resilience of vulnerable households. However, there is a lack of research in India that examines the potential impact of shocks on poverty and future deprivation. The objective of this study is to estimate vulnerability to multidimensional poverty (VMDP) and analyse the factors that lead to loss of well-being after experiencing adverse events in rural Odisha. Using survey data from 479 households, the study first estimated multidimensional poverty (MDP), adopting a counting approach. Secondly, the estimation of VMDP is performed using the three-step feasible generalised least squares approach. The results show that 55% of the surveyed households are vulnerable to MDP in rural Odisha. It is also observed that 35% of currently poor households are likely to remain poor and 20% of non-poor households are at risk of sliding into poverty. The study suggests that poverty alleviation policies should cover not just those in poverty today but also those at risk of becoming poor in the near future.