Anyone scanning the news would be aware that the summary results of the Nepal Living Standards Survey (NLSS) 2022-23 have now been published. Unlike during previous iterations when ordinary folks with an appetite for learning more had no immediate access and the only resort was reliance on news stories, the report was also simultaneously made available online. Which is rather fortuitous since it not only gives everyone a peek into statistical facts from this round of the NLSS not picked up by the media but in this column and the next one also for indulging in a bit of contextual detour as well.

First, the big takeaway regarding how we are doing in terms of lifting people out of poverty based on what they eat and spend on. Starting with NLSS I (1995-96) through NLSS II (2003-04) and NLSS III (2010-11) and now NLSS IV, the proportion of people living in poverty has gone down consistently: 42 percent, 31 percent, 25 percent and 20 percent, respectively. Of course, nothing matches the dramatic improvement seen between NLSS I and NLSS II, when more than a quarter of the poor were found to have moved above the national poverty line, and that, too, during a period coinciding with the devastating Maoist insurgency.

The NLSS IV report did state that had the parameters from NLSS III been used, the poverty rate would have gone down to 4 percent. But because the state of poverty (or wealth) is always relative, the poverty line has been raised to keep up with people’s consumption patterns. In simple terms, and this is only by way of example, if being able to afford meat only once a week designated one as not poor in 2010-11, in order to retain that status a decade later, one would have had to have meat on the menu twice or thrice a week. Or, as the National Planning Commission noted: “Some of what used to be luxury items became necessities.”

Perhaps because the only reference to it was in a note in the summary report, news articles did not mention that there had been a similar adjustment in NLSS III, making allowances for people’s higher spending habits compared to NLSS I and II. Otherwise, based on the same “basket”, as the categories of food and non-food items are known as when measuring poverty indices, necessary to meet basic needs as in the previous two survey rounds, the poverty rate would have been 13 percent in 2010-11 (instead of 25 percent)—and perhaps even been completely eliminated by now. This also partly explains the massive decrease in poverty rates between NLSS I and II since both used the same basket while adjusting only for inflation.

Given that this round of NLSS takes into account Nepal as a federal state, we now know for the first time how the different provinces have been doing. Sudurpaschim fares the worst with nearly a third of the population under the poverty line. Next come Karnali and Lumbini, with 27 and 24 per cent, respectively. Likewise, 23 percent of the Madhesh population is poor but because of its relatively large share of the national population, the actual number of the poor is the highest in Madhesh, accounting for 25 percent of the country’s poor. Gandaki has come out on top with the lowest proportion of people in poverty (12 percent) but also the lowest share of the actual poor, at just 5 percent of the total.

The “analytical domains” considered by NLSS IV consist of 15 in total—the rural and urban areas of the seven provinces, with the Kathmandu Valley taken separately. It is also no surprise that the Valley does best among these 15, with only 7 percent of the population below the poverty line. At the other end of the spectrum is rural Sudurpaschim, with a poverty rate of 40 percent. Next come urban Sudurpaschim and rural Karnali, at 31 percent each. The big surprise is that rural Bagmati, with a poverty rate of 25 percent, is above all the rest, even urban Karnali. Of course, we all know that the urban-rural divide is quite artificial, and there are large parts of what are classified as urban are nowhere near like that, at least not yet. Which is why the performance of rural Bagmati is all the more striking.

It is worth looking at how NLSS IV compares with another measure of poverty, the Multidimensional Poverty Index (MPI). The latter looks at a set of 10 variables within the three main dimensions of education, health and living standard to calculate poverty. The one and only national MPI report so far, from 2018, is based on another government survey from 2014, and hence, not comparable. But there is no harm pointing out that, according to the MPI, Karnali was the worst off, with 51 percent of the population “multidimensionally poor” followed closely by Madhesh with 48 percent. Bagmati (12 percent) did the best with Gandaki (14 percent) and Koshi (20 percent) close behind. It does make me wonder if the somewhat divergent NLSS IV results reflect only methodological differences or if people’s well-being has progressed at variable rates in different provinces.

Another interesting fact from NLSS IV is that the number of those living below the official poverty line in Nepal in absolute terms has gone down over the preceding decade. Calculated on the basis of the 2011 and 2021 censuses, and so not wholly accurate, the total number of the poor is now 5.9 million compared to 6.7 million when NLSS III was conducted. Considering the many setbacks the country has experienced over all these years—from the 2015 earthquake and the subsequent Indian blockade followed by the chaotic and still-incomplete transition to federalism and the Covid-19 pandemic, not to mention a succession of feckless governments—it should still be viewed as a significant achievement.

We will have to wait for analytical reports of the NLSS IV data to get a better understanding of the cause of this decline in poverty rates. Since the national economy has not grown enough to account for it, the only answer has been external remittances, both in 2003-04 and 2010-11. However, remittance appears to be but one factor. As a World Bank paper reported, remittances can be attributed for only 27 percent of reduction in poverty between 1995-96 (NLSS I) and 2010-11 (NLSS III). A lion’s share (52 percent) was due to rising labour income within households which could itself have been affected positively by the migration of a large body of the workforce from all over the country.

We will also have to wait to see how conditions have changed for different caste and ethnic groups. The portents are not that encouraging as is evident in the case of rural Bagmati with its majority Tamang population. The imperative for such an analysis will be dealt with two weeks hence.