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GS Paper: GS3

  • Tax-to-GDP ratio to hit all-time high of 11.7% of GDP in FY25

    tax

    Introduction

    • India’s tax landscape is anticipated to witness significant growth in the coming fiscal year, with the tax-to-GDP ratio expected to reach a historic high of 11.7%.
    • Revenue Secretary Sanjay Malhotra highlights the role of direct taxes in driving this uptick and emphasizes the government’s commitment to streamlining the tax regime for enhanced efficiency and reduced disputes.

    Why ‘Tax-to-GDP’ Ratio matters?

    • The tax-to-GDP ratio measures a nation’s tax revenue relative to the size of its economy.
    • This ratio is used with other metrics to determine how well a nation’s government directs its economic resources via taxation.
    • Developed nations typically have higher tax-to-GDP ratios than developing nations.
    • Higher tax revenues mean a country can spend more on improving infrastructure, health, and education—keys to the long-term prospects for a country’s economy and people.
    • According to the World Bank, tax revenues above 15% of a country’s gross domestic product (GDP) are a key ingredient for economic growth and poverty reduction.

    Forecasted Rise in Tax-to-GDP Ratio

    • Expected Surge: India’s tax-to-GDP ratio is projected to hit 11.7% in 2024-25, showcasing a steady increase from 11.6% in the preceding year and 11.2% in 2022-23.
    • Dominance of Direct Taxes: The surge in the tax ratio is primarily attributed to the growth of direct taxes, which are deemed more equitable.

    What led to this growth?

    [A] Direct Tax Collection

    • Optimistic Outlook: Revenue Secretary anticipates a rise in the adoption of the new tax regime, characterized by simplified tax structures and a higher tax-free income threshold.
    • Growth in Personal Income Tax: Personal income tax collections have witnessed a substantial 28% growth, with a projected moderation to 20%-22% by the fiscal year-end.

    [B] Rationalizing GST Rates

    • Ongoing Review: A Group of Ministers (GoM) appointed by the GST Council is reviewing the rate structure, aiming to rationalize GST rates on various items.
    • Quarterly Meetings: The GST Council is expected to convene regularly to address rate rationalization, although no fixed date has been announced yet.

    [C] Projected Revenue Growth

    • Modest Projections: Despite a buoyant revenue growth of 1.4% this year, projections for the following fiscal year aim for a 1.1% buoyancy, aligning with an anticipated nominal GDP growth of 10.5%.
    • Corporate Tax Dynamics: The deadline for availing the reduced corporate tax rate ends in March 2023, with a significant proportion of companies already benefitting from it.
    • Enforcement Measures: While the Department of Revenue focuses on tax administration, the Enforcement Directorate intervenes in cases related to money laundering, ensuring comprehensive enforcement mechanisms.

  • Interplanetary Dust damage NASA’s Juno Mission  

    Juno

    Introduction

    • Juno, a spacecraft launched by NASA in 2011, embarked on a mission to unravel the secrets of Jupiter and its moons.
    • En route to Jupiter, Juno encountered fast-moving dust particles, resulting in significant damage to its solar panels.

    About NASA’s Juno Mission

    Description
    Launch Year 2011
    Mission Objective Study Jupiter, the largest planet in the solar system, to gain insights into the origin and evolution of Earth.
    Focus Areas
    1. Investigate Jupiter’s atmosphere composition and isotopic ratios.
    2. Study Jupiter’s magnetic field and its interaction with the atmosphere, leading to aurora formation.
    3. Explore Jupiter’s structure, atmosphere, and interior to understand early solar system conditions.
    Earth Insights
    • Juno mission’s advanced instruments include the Microwave Radiometer, which measures atmospheric temperature and water content.
    • By comparing Jupiter’s composition with Earth’s, scientists infer similarities and differences in planetary origins.
    • Understanding the magnetic field and auroras on Jupiter contributes to knowledge about Earth’s own magnetic field and auroras.
    • Studying Jupiter’s structure provides clues about early solar system conditions and Earth’s evolutionary processes.

    Dusts in Interplanetary Space

    • Calculating Dust Flux: Scientists harnessed Juno’s data to estimate the flux of dust particles encountered between 1 and 5 Astronomical Units (AU), shedding light on the density and distribution of interplanetary dust.
    • Exploring Dust Sources: Analysis suggested Mars’s moons, Deimos and Phobos, as potential sources of interplanetary dust, offering tantalizing clues to unraveling the enigmatic origins of these celestial particles.

    How Martian Moons, Deimos and Phobos produce this Dust?

    • Micrometeorite Impacts: Micrometeorites, tiny yet potent dust particles, bombard Mars’s moons, creating ephemeral clouds of dust upon impact due to the absence of atmospheres.
    • Escape into Space: Deimos and Phobos, characterized by low gravity, facilitate the escape of dust particles into space, contributing to the formation of a dusty ring around Mars.

    Insights from Observations

    • Gravitational Dynamics: This models incorporated gravitational effects, lunar shapes, and dust particle velocities, offering a comprehensive understanding of the dust dynamics within the Martian system.
    • Validation through Future Missions: Prospective missions to Deimos and Phobos hold the promise of validating the recent findings, shedding further light on the dusty realms of these enigmatic moons.

  • Water (Prevention and Control of Pollution) Amendment Bill, 2024

    Introduction

    • The Water (Prevention and Control of Pollution) Amendment Bill, 2024 was tabled in the Rajya Sabha on February 5, 2024, aiming to amend the Water (Prevention and Control of Pollution) Act, 1974.
    • This legislation, instrumental in establishing central and state pollution control boards (CPCB and SPCBs), undergoes significant modifications under the proposed Bill, primarily concerning penalties and regulatory mechanisms.

    About Water (Prevention and Control of Pollution) Act, 1974

    Description
    Objective To prevent and control water pollution and maintain or restore the wholesomeness of water resources
    Applicability Applies to the entire territory of India, including streams, rivers, lakes, inland water bodies, subterranean waters, and territorial waters of the country
    Establishments Establishes Central Pollution Control Board (CPCB) at the central level and State Pollution Control Boards (SPCBs) at the state level
    Standards and Regulations Empowers Pollution Control Boards to prescribe standards for the discharge of pollutants and quality of water for various purposes
    Consent Mechanism Requires industries and establishments to obtain prior consent from Pollution Control Boards before discharging pollutants into water bodies
    Penalties and Enforcement Specifies penalties for contravention, including fines and imprisonment; authorizes officers to inspect premises, take samples, and issue directives for compliance

     

    Key Amendments Proposed:

    [A] Consent Exemptions for Establishing Industries

    • Prior Consent Requirement: Currently, the Act mandates obtaining consent from SPCBs for setting up industries or treatment plants likely to discharge sewage into water bodies.
    • Bill Provisions: The Bill empowers the central government, in consultation with the CPCB, to exempt certain industrial categories from seeking consent. It also authorizes the central government to issue guidelines for the grant, refusal, or cancellation of such consent.
    • Penalties: Violating the consent requirement or tampering with monitoring devices incurs penalties ranging from Rs 10,000 to Rs 15 lakh.

    [B] Chairman of State Board

    • Nomination Process: While the Act vests state governments with the authority to nominate SPCB chairpersons, the Bill introduces central government-prescribed nomination procedures and terms of service.

    [C] Discharge of Polluting Matter

    • Regulatory Measures: The SPCBs can issue directives to halt activities leading to the discharge of harmful substances into water bodies.
    • Penalties: Contraventions against pollution standards attract penalties ranging from Rs 10,000 to Rs 15 lakh, replacing the previous imprisonment provisions.
    • Amended Provisions: The Bill replaces imprisonment with penalties between Rs 10,000 and Rs 15 lakh for unspecified offences under the Act.

    [D] Adjudication Mechanism

    • Appointment of Officers: It allows the central government to designate adjudication officers, with appeals against their decisions to be lodged before the National Green Tribunal.
    • Penalty Utilization: Fines collected are directed to the Environment Protection Fund established under the Environment (Protection) Act, 1986.

    [E] Cognizance of Offences

    • Expanded Scope: The Bill extends the entities empowered to file complaints to include adjudication officers, alongside CPCB and SPCB.
    • Penalization: Heads of departments are subject to penalties equal to one month’s basic salary if their departments violate the Act, reinforcing accountability within government bodies.

    Challenges with the Bill

    • Lack of Oversight: Granting exemptions for certain industrial categories from seeking consent may lead to increased pollution levels if not properly regulated.
    • Risk of Unchecked Discharge: Lack of oversight could result in unchecked discharge of pollutants into water bodies, compromising water quality and public health.
    • Centralized Nomination Process: Central government-prescribed nomination procedures for the appointment of State Pollution Control Board (SPCB) chairpersons may undermine the autonomy of state governments.
    • Reduced Deterrence: Replacing imprisonment provisions with penalties for contraventions against pollution standards may reduce the deterrence effect.
    • Questionable Adjudication Process: Allowing the central government to designate adjudication officers may raise questions about the impartiality and independence of the adjudication process.
    • Potential Administrative Inefficiencies: Extending the entities empowered to file complaints may lead to overlapping jurisdictions and administrative inefficiencies, resulting in delays and bureaucratic hurdles.

    Way Forward

    • Enhanced Regulation: Implement stringent monitoring and regulatory mechanisms to ensure compliance with pollution standards and prevent unauthorized discharge of pollutants into water bodies.
    • Stakeholder Consultation: Conduct extensive consultations with environmental experts, industry representatives, and civil society organizations to address concerns and refine the proposed amendments.
    • Capacity Building: Provide training and capacity-building programs for Pollution Control Boards to enhance their skills in enforcing environmental regulations effectively.
    • Transparency and Accountability: Ensure transparency in the exemption process and establish accountability mechanisms to uphold the integrity of regulatory decisions.
    • Public Awareness: Conduct public awareness campaigns to educate industries and the general public about the importance of water conservation and pollution prevention measures.

  • Wages of inequality: The income-growth gap

    Income Inequality - Definition, Explained, Causes, Examples

    Central Idea:

    The article analyzes the recent interim Union budget in India, focusing on its macroeconomic policy objectives and the challenges facing the Indian economy. It discusses the government’s efforts to reduce the debt-to-GDP ratio and stimulate GDP growth, particularly by prioritizing capital expenditure over revenue expenditure. However, it questions the effectiveness of these objectives in addressing India’s developmental challenges, especially regarding employment generation and structural transformation.

    Key Highlights:

    • The budget presents a fiscally conservative approach with minimal increases in total expenditure, emphasizing capital expenditure over revenue expenditure.
    • The government aims to reduce the debt-to-GDP ratio, primarily by limiting expenditure growth rates and increasing capital expenditure.
    • The article raises concerns about the adequacy of these objectives in addressing India’s developmental challenges, particularly the need for employment generation and structural transformation.
    • It highlights the stagnation in regular wages and the dominance of self-employment, indicating a worsening income distribution and weak improvements in welfare.

    Key Challenges:

    • Balancing fiscal consolidation with the need for increased government expenditure to address developmental challenges.
    • Promoting structural transformation to shift workers from self-employment to modern sectors.
    • Achieving inclusive growth that benefits all sections of society, especially marginalized groups.
    • Enhancing the effectiveness of government spending to stimulate economic growth and employment generation.

    Key Terms:

    • Debt-to-GDP ratio: The ratio of a country’s total debt to its gross domestic product, indicating its ability to repay debt.
    • Capital expenditure: Spending on acquiring or maintaining physical assets such as infrastructure, machinery, and buildings.
    • Revenue expenditure: Day-to-day spending on government operations and services, including salaries, pensions, and subsidies.
    • Primary deficit: The fiscal deficit excluding interest payments on government debt.
    • Structural transformation: The process of shifting resources, including labor, from traditional sectors like agriculture to modern sectors such as manufacturing and services.

    Key Phrases:

    • Fiscally conservative approach
    • Debt stability
    • Structural change
    • Employment generation
    • Inclusive growth

    Key Quotes:

    • “The budget reflects a fiscally conservative approach with minimal increases in total expenditure.”
    • “The government aims to reduce the debt-to-GDP ratio, primarily by limiting expenditure growth rates and increasing capital expenditure.”
    • “The dominance of self-employment indicates a worsening income distribution and weak improvements in welfare.”

    Key Examples and References:

    • Comparison of expenditure growth rates and GDP growth rates to illustrate the government’s strategy in reducing the debt-to-GDP ratio.
    • Analysis of employment data to highlight the challenges of structural transformation and income distribution.

    Key Facts and Data:

    • Total budgeted expenditure, with minimal increase over the previous year.
    • Debt-to-GDP ratio currently at a certain level, targeted to be reduced to another level.
    • Stagnation in regular wages and dominance of self-employment in the workforce.
    • GDP growth rates and expenditure growth rates used to analyze the effectiveness of fiscal policies.

    Critical Analysis:

    The article provides a critical assessment of the interim Union budget’s macroeconomic policy objectives, highlighting potential shortcomings in addressing India’s developmental challenges. It questions the effectiveness of targeting a specific debt-to-GDP ratio and emphasizes the need for broader strategies to promote inclusive growth and structural transformation.

    Way Forward:

    • Reevaluate fiscal policies to ensure a balance between debt reduction and addressing developmental challenges.
    • Prioritize investments in infrastructure and human capital to stimulate economic growth and employment generation.
    • Implement targeted interventions to support marginalized groups and promote equitable income distribution.
    • Enhance monitoring and evaluation mechanisms to assess the impact of government spending on welfare and economic development.

  • Unusual Cabbage Mutation that Could Boost Crop Yield

    cabbage mutation

    Introduction

    • A recent paper sheds light on the remarkable ability to induce sterility in a diverse range of plants, including cabbage, cauliflower, broccoli, tomato, and rice. This sterility is achieved through a minute genetic deletion.
    • This deletion holds the promise of significantly boosting crop yields through a phenomenon known as heterosis.

    Unveiling Genetics

    • DNA Structure: DNA consists of two long strands, each comprising four nucleotide bases: Adenine (A), Cytosine (C), Guanine (G), and Thymine (T). These bases form pairs (A-T and G-C) held together by hydrogen bonds.
    • Genome Organization: The cabbage plant (Brassica oleracea) genome contains approximately 1.06 billion base pairs distributed across 18 chromosomes. Each chromosome pair, derived from pollen and egg, shares a mostly identical sequence.
    • Role of Genes: Genes are well-defined DNA sequences, typically spanning a few thousand base pairs. When expressed, a gene’s segment is transcribed into RNA, which serves as the blueprint for protein synthesis.
    • Protein Production: RNA is processed by cellular machinery called ribosomes, directing the assembly of amino acids into proteins.

    Role of Sterility in Hybrid Vigor

    • Discovery of Ms-cd1: Around 44 years ago, a cabbage plant with a natural mutation known as Ms-cd1 was identified. This mutation rendered the plant male-sterile, with a crucial twist: the eggs of the mutant plant could still be fertilized by pollen from normal plants, yielding normal seeds.
    • Hybrid Seeds: All seeds from mutant plants resulted from out-crossing, where eggs were fertilized by pollen from different strains. Such hybrid seeds, also called out-cross seeds, give rise to more robust plants with enhanced vigor, known as heterosis.
    • Dominant Mutation: The Ms-cd1 mutation was found to be dominant, meaning its presence in just one chromosome of the pair caused male sterility, regardless of the other chromosome’s status.
    • Recessive Mutations: The researchers demonstrated that mutations in both copies of the Ms-cd1 gene were necessary for male fertility. In such cases, the mutations became recessive.

    Crucial Missing Base-Pair

    • Genetic Mapping: Through genetic mapping, researchers identified a crucial distinction between the mutated and non-mutated Ms-cd1 genes: the mutated gene lacked a single DNA base pair in its promoter region.
    • Promoter’s Role: The promoter sequence binds to regulatory proteins that control when and in which cells a gene is transcribed into RNA.
    • ERF Binding: In the mutated gene, this missing base-pair disrupted its binding to the regulatory protein ERF, allowing the Ms-cd1 gene to remain expressed, leading to male sterility.
    • Fine-Tuning of Protein Levels: Proper pollen development depends on a precise balance of Ms-cd1 protein levels, with ERF binding regulating its expression at different stages of development.

    Extending the Discovery

    • Cross-Species Applicability: The dominant mutant gene was introduced into other plant species, including rice, tomato, and arabidopsis. In all cases, the recipient plants exhibited pollen developmental disruptions.
    • A Promising Tool: The genetic deletion of a single base-pair emerges as a powerful tool to produce hybrid seeds, not only in cabbage but also in various other crops.
    • Implications for Agriculture: This breakthrough offers the potential to harness heterosis and enhance crop yields across plant species, addressing global food security challenges.

    Conclusion

    • The genetic deletion that induces male sterility in plants represents a remarkable stride in agricultural science, offering the prospect of abundant harvests through hybrid seeds.
    • This discovery opens new doors for sustainable agriculture and reinforces the critical role of genetic research in addressing the world’s growing food demands.

  • Ergosphere: A Unique Feature of Rotating Black Holes

    Ergosphere

    Introduction

    • Rotating black holes, also known as Kerr black holes, possess a fascinating region called the ergosphere, which sets them apart from their non-rotating counterparts.

    Formation of Black Holes

    • Origin: Black holes are born from massive stars that exhaust their nuclear fuel and undergo a supernova explosion. The remaining core collapses under its own gravitational force, forming a black hole.
    • Gravitational Singularity: At the core of a black hole lies a gravitational singularity, a point where the laws of general relativity cease to provide accurate predictions.
    • Event Horizon: Surrounding the singularity is the event horizon, a boundary beyond which nothing, not even light, can escape. It acts as a point of no return for anything entering it.

    What is Ergosphere?

    • Ergosphere Description: Beyond the event horizon, rotating black holes feature another unique region known as the ergosphere. This region extends further out from the singularity, creating an additional sphere around the black hole.
    • Name Origins: The term ‘ergosphere’ finds its roots in the Greek word ‘ergon,’ which means ‘work.’ It earned this name due to the intriguing possibility it offers – the extraction of matter and energy from this region.

    Characteristics of the Ergosphere

    • Intriguing Property: Unlike the event horizon, objects can enter the ergosphere and potentially escape from it, provided they move at speeds less than that of light.
    • Acceleration Potential: Some scientists have explored the idea of sending objects into the ergosphere to leverage their unique characteristics. Objects within the ergosphere can gain energy and momentum, effectively “borrowing” some of the black hole’s angular momentum.

  • Why is Fiscal Consolidation So Important?

    Introduction

    • In her Budget speech, FM revealed the government’s plans to reduce the fiscal deficit to 5.1% of GDP in 2024-25 and below 4.5% by 2025-26, surprising many analysts who expected slightly higher deficit targets.
    • This article explains fiscal deficit, its significance, how the government funds it, and the implications of reducing the deficit.

    What is Fiscal Deficit?

    • Definition: Fiscal deficit represents the gap between a government’s revenue and its expenditure. When expenses exceed revenues, the government must borrow money or sell assets to cover the deficit.
    • Revenue Sources: Taxes are the primary source of government revenue. In 2024-25, tax receipts are expected to be ₹26.02 lakh crore, while total revenue is estimated at ₹30.8 lakh crore. Total government expenditure for the same period is projected at ₹47.66 lakh crore.

    Government Funding of Fiscal Deficit

    • Borrowing: To finance the fiscal deficit, the government borrows money from the bond market, where lenders compete to purchase government-issued bonds.
    • Central Banks: Central banks, such as the Reserve Bank of India (RBI), play a significant role in the credit market by purchasing government bonds in the secondary market, indirectly providing funds to the government.
    • Borrowing Amount: In 2024-25, the Centre aims to borrow ₹14.13 lakh crore from the market, lower than the target for 2023-24.

    Why Does Fiscal Deficit Matter?

    • Inflation: High fiscal deficits can lead to inflation, as the government may resort to printing money to fund the deficit.
    • Market Confidence: Fiscal discipline, reflected in lower deficits, can boost confidence among lenders, potentially improving bond ratings and reducing borrowing costs.
    • Debt Management: A high fiscal deficit can strain the government’s ability to manage public debt. India’s public debt may rise significantly, affecting the country’s fiscal health.
    • International Borrowing: A lower fiscal deficit may make it easier for the government to issue bonds overseas and access cheaper credit.

    Future Prospects

    • Reducing Fiscal Deficit: The government plans to lower the fiscal deficit to 5.1% of GDP in 2024-25. It aims to achieve this primarily through increased tax collections, expecting a rise of 11.5%.
    • Balancing Act: Balancing the budget through tax hikes could dampen economic growth, but achieving the ambitious fiscal deficit target remains uncertain.

    Conclusion

    • Fiscal deficit, the gap between government revenue and expenditure, holds significant implications for inflation, market confidence, debt management, and international borrowing.
    • The government’s plan to reduce the fiscal deficit in the coming years involves a delicate balance of revenue generation and expenditure control.

  • Rare Dusted Apollo Butterfly Spotted in Himachal Pradesh

    butterfly

    Introduction

    • In a remarkable discovery, the elusive Dusted Apollo butterfly (Parnassius stenosemus) was sighted and photographed for the first time in Himachal Pradesh.

    Dusted Apollo

    • Historical Rarity: Dusted Apollo is a rare high-altitude butterfly, initially discovered in 1890.
    • Sighting Details: The butterfly was spotted and photographed in September 2023 during a trek to Manimahesh Lake in Chamba.
    • Wide Range: The Dusted Apollo’s distribution extends from Ladakh to West Nepal.
    • Altitude Preference: This unique butterfly thrives at altitudes ranging from 3,500 to 4,800 meters in the inner Himalayas.
    • Comparing Species: Dusted Apollo closely resembles Ladakh Banded Apollo (Parnnasius stoliczkanus) but exhibits distinct features.

    Implications for Conservation

    • Rare Find: Dusted Apollo had never been photographed in Himachal Pradesh before.
    • Additional Discovery: Another rare species, Regal Apollo (Parnnasius charltonius), was also photographed at Manimahesh, protected under Schedule II of the Wildlife Protection Act, 1972.
    • Commercial Significance: Apollo butterflies are commercially valuable and are targeted by poachers, emphasizing the need for conservation.
    • Endangered Species: Many Apollo butterfly species are endangered and require immediate conservation efforts.
    • Community Awareness: Raising awareness about poaching and the significance of these species is vital for their protection.
    • Conservation Measures: Suggested measures include establishing butterfly parks and conservation reserves in the state to safeguard these fragile creatures.

  • Can India become a $7 Trillion Economy by 2030?

    $7 Trillion Economy

    Introduction

    • The Indian government’s recent review of the economy has set an ambitious target of achieving a $7 trillion economy by 2030.
    • This article analyzes the feasibility of this goal and explores the factors that contribute to India’s economic outlook.

    $7 Trillion Economy: Key Findings

    • Robust Growth: The review expects India to sustain a growth rate of 7% or higher in the fiscal years 2023-24 and beyond.
    • Economic Strengths: The government highlights significant strengths, including substantial infrastructure investments, a healthy financial sector, strong household finances, comfortable forex reserves, controlled inflation, and a decreasing fiscal deficit.
    • $7 Trillion Vision: Based on these factors, the review envisions India reaching a $7 trillion economy by 2030.

    India’s Economic Journey

    • Historic Growth: India took 60 years to reach a $1 trillion economy (2007-08), achieved $2 trillion in just seven years (2014-15), and surpassed $3 trillion by 2021-22.
    • Current Status: India is now the world’s fifth-largest economy, with a GDP estimated to reach $3.7 trillion by the end of 2023-24.

    Obstacles to Rapid Growth

    • Slower Growth Phase: After a period of rapid growth, India’s economy began to decelerate post-2014, exacerbated by events such as demonetization in 2016 and the pandemic-induced contraction.
    • Ambitious Targets: India had set ambitious targets of becoming a $5 trillion economy by 2024-25 and a $10 trillion economy by 2029-30, but achieving them will require overcoming challenges.
    • Growth Rate Hurdle: To reach a $7 trillion economy by 2030, India must achieve a compounded annual growth rate (CAGR) of 11.9% from 2023-24 to 2029-30, compared to the expected CAGR of 6.7% from 2013-14 to 2023-24.

    Challenges Ahead

    • Global Economic Trends: Developed economies are facing declining growth due to inflation and environmental concerns, which could affect India’s export prospects.
    • Protectionism: Increasing protectionism in the global trade landscape poses challenges for India’s export-oriented growth.
    • Geo-Political Uncertainties: Geo-political tensions can fuel inflation and hinder economic growth, presenting additional hurdles.

    Conclusion

    • While India’s economic potential remains substantial, achieving a $7 trillion economy by 2030 is a formidable challenge.
    • The nation must navigate global economic shifts, tackle protectionist policies, and address geo-political uncertainties to realize this ambitious vision.
    • Success will require sustained efforts and innovative strategies to drive economic growth and resilience.

  • Multidimensional Poverty in India: A Decade of Progress

    Multidimensional Poverty

    Introduction

    • Finance Minister Nirmala Sitharaman announced in her Interim Budget speech that 25 crore Indians were lifted out of poverty over the past decade.
    • This remarkable achievement reflects the government’s commitment to inclusivity.

    Data from NITI Aayog’s Discussion Paper

    • NITI Aayog’s Insight: The data comes from a discussion paper titled “Multidimensional Poverty in India Since 2005-06,” authored by Ramesh Chand and Yogesh Suri from NITI Aayog, with inputs from the UNDP and OPHI.
    • Decline in Multidimensional Poverty: The paper reveals that multidimensional poverty in India reduced from 29.17% in 2013-14 to 11.28% in 2022-23, with around 24.82 crore individuals escaping poverty during this period.
    • State-Level Impact: Uttar Pradesh topped the list with 5.94 crore individuals escaping poverty, followed by Bihar at 3.77 crore and Madhya Pradesh at 2.30 crore.

    Understanding the Multidimensional Poverty Index (MPI)

    • A Novel Approach: MPI differs from traditional poverty measures, incorporating health, education, and living standards. These three dimensions each hold one-third weight in the index.
    • Indicators: MPI uses 10 indicators, including nutrition, child mortality, education, housing, and access to basic amenities, offering a comprehensive view of poverty.
    • India’s Unique MPI: India’s MPI includes additional indicators focusing on maternal health and access to bank accounts, aligning it with national priorities.

    Calculating MPI

    • Identifying “MPI Poor”: If an individual is deprived in at least one-third of the 10 weighted indicators, they are considered “MPI poor.”
    • Three Key Calculations: MPI requires three calculations:
      1. Incidence of Multidimensional Poverty (H): The proportion of MPI poor individuals in the population.
      2. Intensity of Poverty (A): The average proportion of deprivation experienced by MPI poor individuals.
      3. MPI Value: Obtained by multiplying H and A, revealing the share of weighted deprivations faced by MPI poor individuals.

    Data Sources and Estimations

    • Health Metrics: Data for health indicators relies on the National Family Health Survey (NFHS), conducted every five years. The last round covered the 2019-21 period.
    • Calculating MPI for 2012-13 and 2022-23: The paper used interpolation for 2013-14 estimates and extrapolation for 2022-23, enabling a comparison of poverty and deprivation trends.

    Conclusion

    • The reduction in multidimensional poverty over the last decade signifies the government’s dedication to inclusive development, improving the lives of millions of Indians.