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Differentiate between consumption based poverty line and NMP I... - Economics
Question
Differentiate between consumption based poverty line and NMP Index based poverty estimates.
Answer
The difference between the Consumption-based Poverty Line and the National Multidimensional Poverty (NMP) Index is as follows:
| Basis | Consumption-based Poverty Line | National Multidimensional Poverty (NMP) Index |
| Criteria | It uses a single dimension: Income or Consumption Expenditure. | It is Multidimensional, covering three areas: Health, Education, and Standard of Living. |
| Methodology | It is based on a minimum calorie intake (2400 for rural, 2100 for urban) converted into a monetary value. | It measures deprivation across 12 indicators like nutrition, school attendance, cooking fuel, sanitation, etc. |
| Focus | It identifies "Income Poverty" (whether a person has enough money to buy basic food). | It identifies "Human Poverty" (whether a person is deprived of basic services and quality of life). |
| Agency | Traditionally estimated by the National Sample Survey Organisation (NSSO). | Estimated by NITI Aayog in India (based on the global MPI model). |
| Objective | To determine if an individual can afford a basic subsistence level. | To capture the overlapping deprivations that people face in their daily lives. |