The key development objective of Pakistan, since its existence, has been to reduce
poverty, inequality and to improve the condition of its people. While this goal seems very
important in itself yet is also necessary for the eradication of other social, political and
economic problems. The objective to eradicate poverty has remained same but
methodology to analysing this has changed. It can be said that failure of most of the poverty
strategies is due to lack of clear choice of poverty definition. A sound development policy
including poverty alleviation hinges upon accurate and well-defined measurements of
multidimensional socio-economic characteristics which reflect the ground realities
confronting the poor and down trodden rather than using some abstract/income based
criteria for poverty measurement. Conventionally welfare has generally been measured
using income or expenditures criteria. Similarly, in Pakistan poverty has been measured
mostly in uni-dimension, income or expenditures variables. However, recent literature on
poverty has pointed out some drawbacks in measuring uni-dimensional poverty in terms of
money. It is argued that uni-dimensional poverty measures are insufficient to understand the
wellbeing of individuals. Poverty is a multidimensional concept rather than a unidimensional.
Uni-dimensional poverty is unable to capture a true picture of poverty because
poverty is more than income deprivation.
Multidimensional wellbeing is not a new concept. Sen (1976) is among the
pioneers to conceptualise the wellbeing in an alternate and direct way using the concept
of capability and functioning. Income is rather an indirect approach to evaluate individual
welfare since it is required to purchase basic needs for example food, shelter, clothing,
etc., assuming a well-functioning market. Consequently, it is true to say that to acquire
certain goods and services income is needed. So, poverty is not the state of deprivation of
certain level of income, that is, one dollar per day or two dollars per day but poverty is a
state of multiple deprivations that poor faces. This multiplicity of dimensions leads to a
broad definition of poverty. Income data is not correctly available and also there are
difficulties in adjusting data for prices and inflation. Multidimensional poverty does not
fluctuate due to inflation. So, this is a relatively stable measure. Indicators reflect a
relatively long term accumulation of welfare.