Islamabad, Apr 8: As many as 60 million Pakistanis are living below the poverty line, making almost a third of the country's population poor under a new formula adopted by the Nawaz Sharif-led government to measure poverty.
The number of poor increased to nearly 30 per cent owing to the adoption of a new methodology for measuring poverty which uses the 2013-14 survey data, said Ahsan Iqbal minister for Planning, Development and Reforms.
He said that the old 2001 model of poverty measurement was based on food energy intake (FEI), which was not a representative one, the Dawn reported. 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. Iqbal said the incumbent government was committing itself to a greater challenge because 2001 poverty line formula that placed 20 million people below poverty line was outdated and misleading.
Under the new measurement, 60 million Pakistanis are living below the poverty line. The new poverty line estimates the number of poor households at 6.8 million to 7.6 million, the report said. "So we are raising bar for ourselves. But we have decided to do so," he said.
Using 2013-14 data, the poverty headcount ratio comes out to be 29.5 per cent of the population. In monetary terms, poverty line stands at Rs 3,030 per adult 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 per cent in 2001-02 to 9.3 per cent in 2013-14.
Further analysis of the past data under the new poverty line estimates the poverty headcount ratio at 63.3 per cent in 2001-02, which has now fallen to 29.5 per cent. Headcount poverty was computed in Pakistan in 2001. Since then the ground reality has changed altogether amid structural reforms, liberalisation, social safety nets, increase in remittances and natural calamities. In the last 16 years, the country has changed in many important ways.
The line, therefore, sets far too low a bar for inclusive development policies, he said. "We needed to choose from reference group, measure of welfare (calories) and method," the minister said, adding: "We have chosen 10-40 per cent of distribution as reference group, 2,350 calories as minimum welfare measure and cost of basic needs as method." Finance minister Ishaq Dar said that whatever formula is used to measure poverty, it was evident that actual poverty has decreased in the country.