Multidimensional Human Deprivation in India: Does Club Convergence Exist?

Abstract

A new measure of multidimensional human deprivation index (MHDI) across 24 states (over 4 time points corresponding to NFHS 1, 2, 3 and 4) is suggested here using principal component analysis (PCA). We observe that our weighted MHDI is found to be consistent with the Human Poverty Index (HPI) and the Multidimensional Poverty Index (MPI) introduced by UNDP in 1997 and 2010, respectively. Though most of the states in India have been experiencing a decline of the incidence of MHDI, but club convergence clearly proves that five major states such as Rajasthan, Madhya Pradesh, Bihar, Uttar Pradesh and Odisha are found consistently to be stable in the higher group of MHDI. Lagged MHDI, human capital investments along with availability of infrastructure are the underlying factors of differential MHDI across states. Therefore, allocation of grants should consider these issues of chronic MHDI found in five major states in order to ensure regional balance, equity and social justice in our federal structure.