In the Multidimensional Poverty Index, housing quality is judged by the material used for the floor. Homes with mud, clay, or dung floors are considered deprived, while houses with solid flooring are counted as non-deprived, based on assumptions of cleanliness and safety.

In the village the authors visited, one family had taken a loan to build a pucca house. The interest rates ranged between 20 to 50 percent. As Munni (name changed) explained, “For smaller needs, the moneylender gives us Rs 10,000, but we must pay Rs 1,000 every month until we can somehow return the entire amount in one lumpsum.”  

These borrowing arrangements trap families in long-term cycles of debt, forcing repeated loans just to manage repayments. While the improved house removes them from the poverty count, the crushing debt that made it possible, and the risk of slipping into generational poverty, remains invisible in the data.