Nepal reports slower decline in poverty
KATHMANDU: Nepal has failed to bring down the poverty rate in the past 12 years as 20% of the population remains pegged below the poverty line, says a new government survey.

Nepal went through political instability, prolonged load-shedding, earthquakes, introduction of the new federal constitution, the first and second federal elections, and the Covid-19 pandemic in this period.

The Fourth Nepal Living Standards Survey 2022-2023 report released by the National Statistics Office on Monday revealed that as many as 20.27% of the population lived below the poverty line in 2023 compared with 25.16% in 2011.

According to the statistics office, the poverty rate was calculated based on a revised poverty line of 72,908 rupees or about US$543 per person per year that is required to fulfill their basic food and non-food consumption needs.

“We expected to cut down the poverty rate to 15% of the population,” said Toyam Raya, chief statistician at the statistics office. “But it stayed over 20% as the deadly earthquake of 2015 and the Covid-19 pandemic affected our efforts.”

Another factor for the worse-than-expected decline in the poverty rate, according to the statistics office, is the raising of the minimum standards for drawing the poverty line.

The poverty line in 2010 to 2011 was set at 19,261 rupees per person per year (based on the minimum cost of daily essentials), which came to 42,845 rupees per person per year following the adjustment for inflation, according to the statistics office.

But the new poverty line was set at over 72,000 rupees considering the changes in consumption patterns that in turn led to increased spending needs, it said.

Had the benchmark been 42,845 rupees per person per year, as in the past, the population below the poverty line would be 3.57%, according to the statistics office.

It added the latest poverty rate was produced based on a survey conducted among 9,600 households across the country.

Experts say Nepal has limited options to lift people out of poverty.

“Nepal does not have a sustainable foundation to elevate people above the poverty line. The decline in poverty rate can be attributed to the inflow of remittances, which has boosted household consumption,” said economist Govinda Nepal.

“Remittance is not a stable source of earning. As long as the migrant workers earn and send money, dependent families can spend. But their consumption may be affected when the migrants return home,” said Nepal.

Efforts made by the government and other stakeholders to alleviate poverty and the rise in wages and remittances had been major drivers in bringing down poverty over the last 12 years, according to officials at the statistics office.

Experts say a significant number of people just above the poverty line can fall below the line even due to minor shocks.

According to the statistics office, there is a gap in poverty in urban and rural areas and the poverty rates are also different in different provinces.

The poverty rate in urban areas stood at 18.34% while it is 24.66% in rural areas, the survey showed.

Province-wise, the poverty rate is the highest (34.16%) in Sudurpaschim and lowest in Gandaki province (11.88%).

Nepal has made significant strides in poverty reduction since the restoration of democracy in 1990.

When the first living-standard survey was conducted in 1995-1996, Nepal’s poverty rate was 42%, which declined to 31% by the time of the second survey in 2003 to 2004.The survey’s results have been released as the government is preparing to draft its16th periodic plan.

“The survey showed Nepal making a remarkable reduction in poverty, even though the reduction was less than expected,” said National Planning Commission vice-chair Min Bahadur Shrestha.

“This report suggests we need to introduce new interventions in the new periodic plan in order to reduce poverty.”

According to the latest living-standard survey, the average annual spending on consumption rose by 66% in the past 12 years, reaching 126,172 rupees in 2023 from 75,902 rupees in 2011. — The Kathmandu Post/ANN
Economy,NepalPovertyRate,2023LivingStandardsSurvey,EconomicDisparity,ProgressAndChallenges,DevelopmentGoals,InequalityReduction,RuralInequality
Nepal has failed to bring down the poverty rate in the past 12 years as 20% of the population remains pegged below the poverty line, says a new government survey.