(a) Do you think that Multi Dimensional Poverty Index (MPI) is a better measure of poverty? Give reasons in support of your…

Multidimensional Poverty Index versus Monetary Measures

The Multidimensional Poverty Index (MPI), formulated by OPHI and UNDP using the Alkire-Foster methodology, represents a distinct conceptual advance over traditional monetary poverty lines, such as those formulated by the Tendulkar and Rangarajan Committees. Monetary measures rely on an income or consumption expenditure threshold to define a minimum basket of goods. In contrast, the MPI measures overlapping deprivations across ten indicators grouped into three equally weighted dimensions: Health (nutrition, child mortality), Education (years of schooling, school attendance), and Standard of Living (cooking fuel, sanitation, drinking water, electricity, housing, assets).

The MPI is a superior diagnostic tool because it identifies deprivation intensity at the individual household level, reflecting the lived experience of poverty where income does not automatically translate into access to basic public goods. It enables targeted policy interventions by disaggregating data across social groups and districts. However, the MPI has limitations: it is subject to data lags due to reliance on periodic survey cycles such as the National Family Health Survey (NFHS), uses debatable normative indicator weightings, masks intra-household allocation inequalities, and excludes non-material dimensions such as political voice and subjective well-being.

According to the Global MPI 2023, India has achieved a notable reduction in multidimensional poverty, recording an MPI value of 0.069 with a headcount poverty ratio of 16.4%, reflecting the lifting of roughly 415 million people out of poverty between 2005-06 and 2019-21.

Development and Problems of the Jute Industry in Pre-Independent India

The Indian mechanized jute industry originated with the establishment of the first spinning mill at Rishra, Bengal, in 1855 by George Acland. While Dundee in Scotland initially held a global monopoly on jute textile production, the locus of manufacturing shifted rapidly to the Hooghly basin due to direct proximity to raw jute acreage, low-cost river transport, and abundant cheap labor. British managing agency houses—collectively known as the "jute wallahs"—exercised cartelized control over the industry through the Indian Jute Mills Association (IJMA), extracting large export profits while suppressing the prices paid to raw jute cultivators.

The industry was impeded by multiple structural problems:

1. Technological obsolescence, as British managing agencies prioritized short-term dividend extraction over capital reinvestment in modern spinning and weaving equipment.
2. Protectionist trade barriers and industrial pressure from Dundee manufacturers.
3. Discriminatory railway and sea freight structures that penalized Indian value-added exports.
4. Monopolistic control of finance and marketing channels by foreign managing agencies.
5. The 1947 Partition, which divided the sector by leaving over 75 percent of the high-grade raw jute-growing areas in East Pakistan, while all 108 processing mills remained in West Bengal, causing severe raw material shortages.

Small and Cottage Industries and Indigenous Entrepreneurship

Small and cottage industries serve as essential engines of indigenous entrepreneurship in India by lowering capital requirements, decentralizing production, and monetizing traditional craft skills. Across sectors like handlooms, handicrafts, and rural agro-processing, they democratize capital ownership and generate non-farm employment. Institutions like the Khadi and Village Industries Commission (KVIC) and cooperative networks such as the Amul model demonstrate how cottage enterprises build grassroots managerial capacity, utilize local raw materials, and foster self-reliant rural industrialization.

However, small enterprises face severe systemic constraints that impede sustained entrepreneurial growth. These units struggle with technological backwardness, volatile raw material supplies, inadequate institutional credit, and limited access to modern supply chains. Consequently, the Indian industrial landscape exhibits a persistent "missing middle," characterized by a vast base of micro-enterprises that remain informal and sub-scale to circumvent labor laws and taxation thresholds, alongside a few large corporations, with few dynamic, scaling medium-sized firms.

Way Forward

Addressing multidimensional deprivations captured by the MPI among rural artisans and industrial labor requires integrated industrial and welfare interventions. Schemes such as the Jute Technology Mission (JTM) and the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) must focus on technological modernization, formal credit access, and cluster development, ensuring that traditional sectors transition from survivalist activities into scalable, modern entrepreneurial ecosystems.