New poverty line makes a third of Pakistanis poor

Image
IANS Islamabad
Last Updated : Apr 08 2016 | 11:42 AM IST

At least 60 million Pakistanis are living below the poverty line, posing a challenge for the government.

The number of poor increased owing to the adoption of a new methodology for measuring poverty which uses the 2013-14 survey data, Dawn online quoted the country's Planning, Development and Reforms minister Ahsan Iqbal as saying on Thursday.

Addressing a seminar on 'Poverty Estimation', co-chairing with Finance Minister Ishaq Dar, Iqbal said that the incumbent government was committing itself to a greater challenge because 2001 poverty line formula that placed 20 million people under poverty line was outdated and misleading.

The new poverty line estimated the number of poor households at 6.8 million to 7.6 million. "So we are raising bar for ourselves. But we have decided to do so," the minister said.

Using 2013-14 data, the poverty headcount ratio comes out to be 29.5 percent of the population.

In monetary terms, poverty line stands at Rs.3,030 per adult equivalent per month, the minister said.

Under the old poverty line, the percentage of the poor fell by around 25 percentage points, from a high of 34.6 percent in 2001-02 to 9.3 percent in 2013-14.

Further analysis of the past data under the new poverty line estimates the poverty headcount ratio at 63.3 percent in 2001-02, which has now fallen to 29.5 percent.

"We needed to choose from reference group, measure of welfare (calories) and method," the minister said, adding: "We have chosen 10-40 percent of distribution as reference group, 2,350 calories as minimum welfare measure and cost of basic needs as method."

The 2001 model of poverty measurement was based on food energy intake (FEI), which was not a representative one. To make it more transparent and coherent, the government has also incorporated costs of basic needs (CBN) for capturing non-food expenditures in the new formula.

Non-food items will include expenditures on education, health and mobile phones. These will be added to basket for calculating the exact number of poor in the country.

*Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Exclusive premium stories online

  • Over 30 premium stories daily, handpicked by our editors

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Apr 08 2016 | 11:32 AM IST

Next Story