The more disturbing factor is that the rate of poverty reduction from the country has slowed a bit during these periods. The period between the first and second Nepal Living Standard Survey (NLSS) saw a decrease of around 11 percentage points in poverty reduction in eight years while the period between the second and the third NLSS has recorded a slow rate of poverty reduction: Just around 6 percentage points in seven years.
Another major finding of the study is the growing differences in the income between different segments of people. The upper 20 percent of the people has hold over 56 percent of the total income while lower 80 percent of the people earn just 44 percent of income with an average per capita income of Rs 41,659 in current price.
Similarly, upper 10 percent of the people consume nine times more than the lower 10 percent of the people with an average per capita consumption of Rs 34,829.
The study shows a high difference in poverty rates amongst the 12 analytical domains, along with seasonal variation. It also shows that poverty rate directly varies with the number of household size along with the number of kids that are under 7, while it inversely varies with higher levels of education, access to basic facilities and households with more than 1 hectare of agricultural land.
One positive result shows that female headed households have slightly lower poverty rate. Dalit and the Far-Western Development Region are the most deprived community and region in the country. Similarly, it shows that households headed by agricultural wage workers are poorest while those headed by professional wage-workers are the least poor. It is interesting to note that out of 12 analytical domains, only in Kathmandu the expenditure in the non-food item is greater than in the food item.
There is nothing wrong with the method applied in the Survey along with the accuracy of the data. The technical and financial support of World Bank, DFID, DANIDA and WFP also enhances its credibility. However, threshold annual income set at Rs 19,261 (food item Rs 11,929, non-food item Rs 7,332) with per capita daily income of around Rs 53 to qualify beyond the poverty line creates a lot of confusion rather than solving them.
The rate of inflation almost touching the double digit, this income level seems to be incapable to address the daily requirement of the people to meet the 2,220 Kcal. It reminds us of similar threshold income set by India recently and criticized by different segments of society. If we apply the universal standard set by the World Bank of US $1.25 (approximately Rs 100), then the number of people below poverty line is bound to increase. Moreover, it mainly focuses on the absolute rather than the relative poverty level.
The period between the first and second Nepal Living Standard Survey (NLSS) saw a decrease of around 11 percentage points in poverty reduction in eight years while the period between the second and the third NLSS has recorded a slow rate of poverty reduction: Just around 6 percentage points in seven years.
This survey has brought into light several policy issues. The result of the neglect of Hilly and Far-Western Development Region of the country is strikingly visible. The rate of poverty in Far-Western Development Region is twice the number of the Eastern Development Region. The policy of inclusion does not seem to be working well as the marginalized people are still left behind in the development process while elite group among them reaping maximum benefits from these provisions leading to the creation of new class division. It is amply proved by the status of Dalit people. Hence, the provision of inclusion should be implemented massively with proper mechanism to see whether the targeted groups are being benefited.
The positive correlation between the incidence of poverty and the household size implies that we need to accelerate our efforts on population control. Similarly, the negative relationship between the incidence of poverty and higher level of education, agricultural land holding, access to facilities and female headed households implies that we need to widen the accessibility of quality education to all along with proper emphasis on basic facilities such as schools, hospitals, roads, drinking water, electricity and irrigation. Similarly, we also need to empower women and apply scientific land reform system so as to reduce the incidence of poverty in the country.
This survey categorically stress on the need to increase the productive employment opportunities in the non-agricultural sector as the agricultural wage workers are found to be more poor in comparison to the professional wage-earner. For this, investment climate in the country needs to be improved with the establishment of proper legal framework and better law and order situation. It also demands improved governance with healthy labor relations.
Given the sluggish rate of economic growth, the dream of poverty alleviation does not seem viable. To make the matter worse, increasing inequality in income distribution has been a breeding ground for perennial source of conflict in the country. We have experimented with various approaches to alleviate poverty. However, nothing seems to be working properly. On the political front, we have made epoch-making changes but on the economic front we do not seem to be serious.
Policymakers seem to be oblivious to the fact that it is economics that strengthen politics. Hence, the time has come to work for providing all a dignified and better living condition. Otherwise, history will forgive none especially those in power.
bishal2u@hotmail.com
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