Astonishing decline in absolute poverty to 13 pc
PREM KHANAL
KATHMANDU, Aug 4: Nepal has recorded an astonishing 18 percentage point decline in absolute poverty in the six years between 2003/04 and 2009/10, leaving just 13 percent Nepalis below the poverty line, according to the yet-to-be published third Nepal Living Standard Survey (NLSS) 2010.
The year-long survey conducted by the Central Bureau of Statistics between January 2010 and 2011 with technical support from the World Bank also shows good progress in bridging income inequality, along with a whopping rise in per capita remittance income. The final report of the survey is expected to be made public at the end of August.
The NLSS uses 2,200 calorie consumption per day per person and access to essential non-food items as the yardstick to measure absolute poverty in Nepal. Based on current market prices, a person needs an income of at least Rs 14,430 per year to manage food items equivalent to 2,200 calorie per day and other essential non-food items. Any individual earning less than Rs 14,430 per year is therefore considered to be below the poverty line.
The CBS has used the same yardstick to measure absolute poverty in Nepal since the first NLSS conducted in 1995/96.
The second NLSS conducted in 2003/04 had concluded that 31.5 percent of the population was under absolute poverty. The second NLLS had fixed the poverty line income at Rs 10,105. The first NLSS in 1995/96 had put the population under absolute poverty at 42 percent.
The substantial and sustained drop in the percentage of population below the poverty line in the last 15 years has surprised many. The 18 percentage point drop in the last six years surprised even the officials and experts who analyzed the NLSS data.
“It appears too good to be true but the sophisticated survey methodology and analyses employed by the World Bank universally can’t go wrong,” said an official involved in the survey.
Income inequality shrank for the first time in six years
Households receiving remittance increased to 55 pc
Sex ration widens to 85.6 from 92.6 in 2003/04
Average household size squeezed to 4.9 persons
According to the official involved in the final assessment of the survey, Kathmandu Valley has the lowest poverty incidence of less than 5 percent while Taplejung, Khotang and Sankhuwasabha have the highest -- up to 23 percent.
The survey, the most comprehensive study of the changing economic dynamics of the Nepali people, also reports a decline in income inequality measured in terms of the Gini-coefficient, which has come down to 0.35 from 0.41 recorded in the second NLSS.
As evidence of shrinking income inequality between poor and rich, the nominal average per capita income of the poorest 20 percent of the population has increased nearly fourfold to Rs 15,888 from Rs 4,003 registered in the second NLLS. However, such income of the richest 20 percent of the population merely doubled, to Rs 94,419 from Rs 40,486 over the period.
The number of households receiving remittance income have also risen dramatically to 55.8 percent from 31.9 percent reported in NLLS 2003/04. The survey has also found that the per capita remittance income has increased to Rs 11,073 from Rs 2,100.
Of this income, 79 percent is used for daily consumption while only 2.4 percent is invested for capital formation. Similarly, the nominal average household income has seen a 2.5-fold increment to Rs 202,374 from Rs 80,111 six years ago.
The survey likewise reckons there has been a major shift in consumption, as nominal per capita consumption more than doubled to Rs 34,829 in 6 years from Rs 15,848 in the second NLLS. The per capita consumption share of the poorest 10 percent, according to the survey, is Rs 11,093 whereas the share for the richest 10 percent is Rs 102,772.
The survey, based on 7,200 samples of households selected randomly nationwide, reckons the sex ratio -- ratio of males to females in the population -- has declined to 85.6 whereas it was 92.6 in the second NLLS and 95.5 in the first NLSS in 1995/96.
Experts say the huge exodus of the male population for foreign employment is the major reason behind the increasingly skewed sex ratio.
Similarly, the average household size has declined to 4.9 from an earlier 5.3 persons while households headed by females has increased to 26.6 percent from 19.6 percent recorded in the second NLLS. The survey further shows that households using cooking gas has doubled to 17.7 percent.
There has been a noticeable change in the pattern of borrowings by Nepalis. Households taking loans from banks have gone up to 20 percent from 15 percent whereas households taking loans from local money lenders has gone down to 15.1 percent from 26 percent six years ago. More than 62 percent of households have outstanding loans as against 66.7 in 2003/04.
Likewise, the survey has recorded a remarkable change in people’s expenditure pattern on food. The expenditure on cereal food has declined by a whopping 16 percentage points to 52.3 percent whereas expenditures on meat and vegetables have increased considerably.
Last edited: 04-Aug-11 06:43 AM
Last edited: 04-Aug-11 02:22 PM
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