As per the preliminary report of the NLSS (2010-2011) made public by the Central Bureau of Statistics (CBS) on Thursday, 25.16 percent Nepalis are still struggling to rise above the poverty line. [break]
Seemingly, there has been over five percentage points decline in Nepal´s absolute poverty in the last six years. In 2003-2004, when the second NLSS was conducted, 30.85 per cent Nepalis, more by 5.69 percentage points than present, were found living below the poverty line.
In 1995-1996, when the first ever NLSS was carried out, a staggering 41.76 percent Nepalis were below the poverty line. Taking into account three different NLSS reports, the number of poor has declined by 16.60 percentage points in the last 15 years.
However, statisticians say that the new poverty report cannot be compared with the previous two reports since the CBS has used a new food basket to gauge incidence of absolute poverty this time around.
This implies that it would not be right to categorically claim that Nepal´s absolute poverty has declined by 5.69 percentage points since 2003-2004 or by 16.60 percentage points since 1995-1996.
"If you just look at poverty decline percentage points, you may simply be misled," says Dinesh Bhattarai, a statistics official at the CBS, adding, "It is because we have used a new food basket this time."
Anil Sharma, another statistics official at the CBS, says that Nepalis´ food consumption patterns have drastically changed in the last 15 years since the first NLSS.
Today, Nepali people are eating less rice and other food grains. Instead, they are eating more protein-rich food items like meat, eggs, fish and milk. This has apparently made it compulsory for policymakers to change the traditional food basket.
"Now, people need to earn more money to manage basic food calories," says Sharma. "Therefore, you cannot compare the new report to the previous one and say that Nepal´s absolute poverty declined by five percentage points in the last five years."
Today, a person needs to consume an average of 2,220 kilo calories of food every day to rise above the poverty line. The NLSS uses the calory requirement plus person´s access to other non-food items as yardstick to measure absolute poverty.
Based on current market prices, a person needs to earn at least Rs 19,261 -- Rs 11,929 for food items and Rs 7,332 for non-food items -- every year to buy basic food calories.
In 2003-2004, a person would need 2144 basic food calories. Earlier, in 1995-1996, a person would require just 2124 basic food calories to escape the poverty line.
With the change in the food basket, people now need more money to manage basic food calories and manage essential non-food items.
The amount of money required for buying basic food calories varies from place to place. In Kathmandu, a person needs to earn Rs 40,933 per year for buying basic food calories and essential non-food items.
Interestingly, in Kathmandu, unlike in other places, buying required non-food items costs more money than buying basic food calories. Here, a person spends Rs 26,323 for non-food items as against Rs 15,610 for basic food calories.
Although the NLSS report shows that 25.16 percent of Nepalis are below the poverty line, the number of poor is higher in rural areas. In rural areas, 27.43 percent people are below the poverty line. On the contrary, only 15.46 percent of people are poor in urban areas.
According to the new NLSS report, Poverty Gap Index (PGI) and Squared Poverty Gap Index (SPGI) stand at 5.43 and 1.81 percents respectively. While the PGI shows how many people are below the poverty line and how far below, the SPGI shows the different poverty levels among the poor.
The Gini-coefficient that shows income inequality has also significantly declined to 0.33 as against 0.43 recorded by the previous NLSS.
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