E-Kantipur

KATHMANDU, OCT 21 -

It is now official. A survey report released on Thursday said 25.16 percent of Nepalis are living below the poverty line.

The report of the Third Nepal Living Standards Survey (NLSS-III) said Nepal recorded 5.7 percent decline in absolute poverty in between 2003-04 and 2009-10.

The survey—the most comprehensive study of the changing economic dynamics of the Nepali people—said the nation is witnessing poverty go down by 2 percent annually.

The NLSS-III was carried out by the Central Bureau of Statistics (CBS) in 2010 and 2011 with technical support from the World Bank. The CBS has been conducting surveys of the living standard since 1995-96. The first NLSS in 1995-96 had shown 41.76 percent of the population living below the poverty line, which came down to 30.85 percent in the second NLSS in 2003-04.

The NLSS uses 2,200 calorie consumption by a person per day and access to essential non-food items as the index to measure poverty in Nepal. Based on current market prices, a person needs an income of at least Rs 14,430 a year to manage food equivalent to 2,200 calorie per day and other essential non-food items. As per the report, an individual earning less than Rs 14,430 per year is below the poverty line. The survey has brought some interesting facts to light. It said poverty level in the urban hills is lower than that in Kathmandu. It also said that households led by agricultural wage workers are the poorest, while those headed by professional wage workers are the least poor. Another interesting fact that has come to light is that households headed by females have a slightly lower poverty rate.

CBS Director Dhundi Raj Lamichhane said hilly cities like Illam, Pokhara, Dhankuta, Dharan and Hetauda have the least poverty level. According to the survey, only 8.72 percent are below the poverty line in the hilly cities while the poverty level in the Capital is 11.47 percent.

In terms of development regions, eastern Nepal has the lowest poverty level (21.44 percent), while the Far-West has the highest level. The NLSS showed that around 46 percent of the population are below the poverty line in the Far-West. Among the ethinic groups, the survey said Hill Dalits and Tarai Dalits have the highest poverty level while the Hill Bhramhins and Newars have the least.

The decline in the poverty level, according to economists and development experts, is due to the rise in remittance inflow, improvement in common Nepalis’ access to basic facilities and the government’s huge investment in the social sector. “More than 50 percent of the Nepalis are receiving remittance, which has ensured better living standards,” said Jagadish Chandra Pokharel, former vice-chairman of the National Planning Commission (NPC).

According to the NLSS-III, 55.8 percent of the households receive remittance with each household receiving Rs 80,436 a year.

However, former NPC vice-chairman Pitambar Sharma cautioned that the decline in poverty without economic growth will not be sustainable. “What if migrant workers abroad start to return?” he said.

However, the worrying factor is that despite the high remittance, the money is not being used in the productive sector. A significant portion (78.9 percent) of the remittance is being used in daily consumption followed by loan repayment. Only 2.9 percent of the total remittance is used for capital formation, according to the NLSS. “It is high time that we work on using remittances in capital formation, which will help generate more income and employment opportunities,” Sharma said. The report calls for more government investment in the social sector (education and health) and infrastructure and says that higher level of education and access to basic facilities play key roles in poverty reduction.

 

Posted on: 2011-10-21 08:22

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