Friday, May 20, 2011

Poverty in India and Pakistan

In spite of recent poverty declines with its rapid economic expansion, India still has higher poverty rates than Pakistan, according to a 2011 World Bank report titled "Perspectives on poverty in India : stylized facts from survey data" released in 2011.



Overall, the latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.



Although consumption poverty has steadily declined in India, the number of people who actually consume calories above the minimum level associated with the poverty line—2,400 and 2,100 kilocalories per day in rural and urban areas, respectively—has not risen. As of 2004–05, as many as 80 percent of rural households were estimated to be “calorie poor.”

India’s middle-class lives barely or not far above India’s poverty line of $1.02 a day, and well below international poverty lines, especially in rural areas.



Large differences in poverty levels persist across India’s states and indeed are growing in urban areas. The rural areas of India’s poorest states have poverty rates that are the highest in the developing world. In contrast, urban areas of Punjab and Himachal Pradesh have poverty rates that are similar to those found in countries such as Turkey or the richer Latin American countries.

The World Bank findings are consistent with the 2008 India State Hunger Index study by Purnima Menon, Anil Deolalikar, Anjor Bhaskar. It showed that Assam and Punjab have much less hunger than the rest of India. Madhya Pradesh has the most severe level of hunger in India, comparable to Chad and Ethiopia. Gujarat, 13th on the Indian list is below Haiti, ranked 69 on the World Hunger Index.

The World Bank report discusses various causes of poverty in India, particularly discrimination against certain castes and tribes who make up most of the poor. It describes exclusion based on caste (SC or scheduled caste) and tribes (ST or scheduled tribes) and describes it as follows:

The Hindu hierarchy is said to have evolved from different parts of the body of Brahma—the creator of the universe. Thus, the Brahmans, who originated from the mouth, undertake the most prestigious priestly and teaching occupations. The Kshatriyas (from the arms) are the rulers and warriors; the Vaishyas (from the thighs) are traders and merchants. The Shudras, from the feet, are manual workers and servants of other castes. Below the Shudras and outside the caste system, lowest in the order, the untouchables engage in the most demeaning and stigmatized occupations (scavenging, for instance, and dealing with bodily waste).

Similarly, the scheduled tribes are also referred to as the Adivasis. .... we use the terms SC and ST, as these are standard administrative and survey categories. In
the text we use the terms Dalits and Adivasis or tribals interchangeably with SCs and STs, respectively.


The report acknowledges that "the Indian Constitution set the stage for almost unparalleled affirmative action and other forms of positive actions. These have been translated into laws, programs, and procedures".

The authors explain that "the combination of identity politics, inflexibility of the very systems that seek to promote inclusion, and the attendant poor implementation has resulted in patchy impact, affecting some groups more than others. To state the real challenge is to state a truism—that the implementation of policies and of reforms of institutions is the key to ensuring that growth becomes more equitable".

Here's a video clip on grinding poverty in resurgent India:



Related Links:

Haq's Musings

New Index Finds Indians Poorer Than Africans

India 63 Years After Independence

South Asia Slipping in Human Development

OPHI Country Briefing: Pakistan

OPHI Country Briefing: India

Slumdog Inspires India's "Big Switch"

Mumbai's Slumdog Millionaire

Poverty Tours in India, Brazil and South Africa

South Asia's War on Hunger Takes Back Seat

British TV Accused of Making "Poverty Porn"

Orangi is Not Dharavi

Bollywood and Hollywood Mix Up Combos

Grinding Poverty in Resurgent India

World Bank FAQs on Indian Poverty

Slumdog Is No Hit in India

Pakistani Children's Plight

UNESCO Education For All Report 2010

India's Arms Build-up: Guns Versus Bread

South Asia Slipping in Human Development

World Hunger Index 2009

Challenges of 2010-2020 in South Asia

India and Pakistan Contrasted 2010

Food, Clothing and Shelter in India and Pakistan

23 comments:

Riaz Haq said...

Though poverty is rampant in India, it's considered a bad world by rabid Hindu Nationalists.

Here's what the Financial Times advised David Cameron when he went to India:

"Avoid any references to poverty. More poor people (in India) than anywhere on earth. But not worth mentioning too loudly. Talk about the New India instead. Mention the aid review."

http://blogs.ft.com/westminster/2010/07/five-elephant-traps-for-cameron-in-india/

Riaz Haq said...

Here's an Op Ed on India's "stingy" poverty definition, as published by Huffington Post:

NEW DELHI — Every day, through scorching summers and chilly winters, Himmat pedals his bicycle rickshaw through New Delhi's crowded streets, earning barely enough to feed his family. But to India's government he is not poor – not even close.

The 5,000 rupees ($110) he earns a month pays for a tiny room with a single light bulb and no running water for his family of four. After buying just enough food to keep his family from starving, there is nothing left for medicine, new clothes for his children or savings.

Still, Himmat is way above India's poverty line.

Earlier this month, India's Planning Commission, which helps sets economic policy, told the Supreme Court that the poverty line for the nation's cities was 578 rupees ($12.75) per person a month – or 2,312 rupees ($51.38) for Himmat's family of four. For rural India, it's even lower at about 450 rupees ($9.93).

The revelation set off an angry debate in a country with soaring economic growth that has brought Ferrari dealerships and Louis Vuitton stores to cater to the new urban rich but left hundreds of millions of others struggling without access to adequate food and clean water.

The World Bank global poverty line, at $1.25 a day or about $38 per month, is three times higher than India's urban level. Local activists say a better name for India's standard would be "the starvation line."

"This number is a joke. There's no seriousness about the poor," activist Aruna Roy said.

The Planning Commission said it has to set the poverty line – which determines who gets government assistance – to make the best use of limited funds.

"When you have such a large number of people, given the resources that are available to the government, do you target the poorest of the poor or do you spread your net wider and succeed in covering nobody?" Pranab Sen, an adviser to the Planning Commission, recently told the NDTV news channel....
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Using the commission's poverty line, 37 percent of India's 1.2 billion people qualify as poor.

The country currently spends 2 percent of its GDP – about 29 billion – in social protection, and half of that goes to the Public Distribution System, which provides the poor with subsidized food. Even with the low poverty line, the system – riddled with corruption and mismanagement – caters to over 440 million people, more than the entire population of the United States.

The World Bank poverty line would add about 60 million more people to that category.

Critics say even that is too few, and that India needs to extend its social security net to hundreds of millions more who like Himmat, the rickshaw puller, live in penury.

The Planning Commission's current approach implies that the coverage of social benefits will shrink if not disappear over time, said Jean Dreze, a development economist affiliated with the Delhi School of Economics.

"In a rapidly growing economy, one would like to see the opposite," he said.

For Himmat, who is illiterate and oblivious to what he can expect from the government, the debate has little meaning.

"My existence doesn't matter to the government. They don't care if people like me live or die," he said.

Riaz Haq said...

Here's a BBC report on how India defines poverty:

India's cabinet has approved a proposal for a survey to identify people living below the poverty line, which also redefines what constitutes poverty.

It will classify the rural poor into "destitutes, manual scavengers and primitive tribal groups".

Urban poor will be defined as those in vulnerable shelters, low-paid jobs and homes headed by women or children.

The survey, to be conducted alongside a caste census later this year, will help identify those who need state aid.

There are various estimates on the exact number of poor in India.

Officially, 37% of India's 1.21bn people live below the poverty line. But one estimate suggests this figure could be as high as 77%.

The last poverty survey was conducted in 2002, but this is the first time that details about caste and religion will be included. The last caste census in India was in 1931.

Under the new system, in rural areas, families owning fixed-line telephones, refrigerators and farmers who have a credit limit of 50,000 rupees ($1,112; £688) will not be counted among India's poorest.

Government staff or those earning 10,000 rupees ($222; £137) a month will also be excluded. Home-owners with three or more rooms will also not be classified as poor.

Officials say the census to identify the people living below the poverty line is "a mammoth task", but it will help them to support those in the greatest need.

On Wednesday, a World Bank report said attempts by the Indian government to combat poverty were not working.

It said aid programmes were beset by corruption, bad administration and under-payments.


http://www.bbc.co.uk/news/world-south-asia-13450959

Riaz Haq said...

Here's a report about health care costs pushing 39 million Indians into poverty each year:

(AP) ALIGARH, India (AP) — When Nasir Khan cried out at night from the searing pain of kidney stones, the entire slum could hear him.

A magic healer promised an inexpensive cure through chanting while pinching his side where the kidney stones were lodged, but it only made it worse. His condition became life-threatening, and doctors said he would need surgery for a fourth time.

The operation cost him — and his extended family — their home.

Without insurance and unable to get a loan, they sold the broken brick shack in the industrial north Indian city of Aligarh for 250,000 rupees, or about $5,500. It had been home to the 35-year-old Khan, his four brothers, three wives and 11 children.

"There is no choice. It is my life," Khan said in gasps, writhing atop a crude wooden cot as his relatives hovered helplessly nearby. He screamed for his mother. He screamed for Allah. He screamed for anyone to deliver him from the pain.

His story is repeated so often across India it evokes little sympathy, yet it represents one of the biggest threats to India's battle to lift its poor up from squalor.

Each year, the cost of health care pushes some 39 million people back into poverty, according to a study published in the Lancet medical journal. Patients shoulder up to 80 percent of India's medical costs. Their share averages about $66 (3,000 rupees) annually per person — a crippling sum for the 800 million or so Indians living on less than $2 a day.
----
Yet India's government spends comparatively little on health care: just 1.1 percent of the country's GDP, a figure that hasn't changed much since 2006 when China was spending 1.9 percent; Russia, 3.3 percent and Brazil, 3.5 percent, according to World Health Organization figures.

"The political will is simply not there yet. We have to help realign the country's priorities," said Dr. K. Srinath Reddy, president of the Public Health Foundation of India and part of a government-commissioned committee recommending reforms.

Statistics that might highlight areas of need are scarce, thanks to erratic case reporting, few autopsies and a tradition of quick cremation that destroys evidence of disease. WHO reports often leave India out for lack of data. A recent study in the Lancet suggests malaria deaths could be 10 times higher than estimated.
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Uttar Pradesh, one of India's poorest states and home to the padlock-manufacturing city of Aligarh, is a land of barren rural landscapes pocked by crumbling mud huts, wandering cattle and roadside shacks selling potato chips and curry.

Its infant mortality rate — 96 of every 1,000 newborns die — makes it one of the worst places on Earth to be born. The average Indian rate is better at 63 but still grim compared with China's 15 deaths out of every 1,000 births.

The state's leader, Mayawati, who uses only one name, rose from India's lowest caste to power and prominence. She calls health care a top priority. Yet since taking office in 2007 she has spent just $224 million on medicines for the state's 195 million people, while spending $569 million to build memorial parks and statues of leading dalits — also known as untouchables — such as herself.
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Cities such as Aligarh, a three-hour drive east of New Delhi over potholed roads, are somewhat better off. They have hospitals, doctors and drugs — though often in short supply. The government says the nation needs tens of thousands of clinics and 700,000 more doctors.

Riaz Haq said...

Here are some excerpts from an Op Ed in The Hindu on growing disconnect between mass media and mass reality:

•The mass reality in India (which has over 70 per cent of its people living in the rural areas), is that rural India is in the midst of the worst agrarian crisis in four decades. Millions of livelihoods in the rural areas have been damaged or destroyed in the last 15 years as a result of this crisis, because of the predatory commercialisation of the countryside and the reduction of all human values to exchange value. As a result, lakhs of farmers have committed suicide and millions of people have migrated, and are migrating, from the rural areas to the cities and towns in search of jobs that are not there. They have moved towards a status that is neither that of a ‘worker' nor that of a ‘farmer.' Many of them end up as domestic labourers, or even criminals. We have been pushed towards corporate farming, a process in which farming is taken out of the hands of the farmers and put in the hands of corporates. This process is not being achieved with guns, tanks, bulldozers or lathis. It is done by making farming unviable for the millions of small family farm-holders, due to the high cost of inputs such as seed, fertilizer and power, and uneconomical prices.
•India was ranked fourth in the list of countries with the most number of dollar billionaires, but 126th in human development. This means it is better to be a poor person in Bolivia (the poorest nation in South America) or Guatemala or Gabon rather than in India. Here, some 83.6 crore people (of a total of 110-120 crore) in India survive on less than Rs.20 a day.
•Eight Indian States in India are economically poorer than African states, said a recent Oxford University study. Life expectancy in India is lower than in Bolivia, Kazakhstan and Mongolia.
•According to the National Sample Survey Organisation, the average monthly per capita expenditure of the Indian farm household is Rs.503. Of that, some 55 per cent is spent on food, 18 per cent on fuel, clothing and footwear, leaving precious little to be spent on education or health.
•A report of the Food and Agriculture Organisation of the United Nations shows that between 1995-97 and 1999-2001, India added more newly hungry millions than the rest of the world taken together. The average rural family is consuming 100 kg less of food than it was consuming earlier. Indebtedness has doubled in the past decade. Cultivation costs have increased exorbitantly and farming incomes have collapsed, leading to wide-scale suicides by farmers.
•While there were 512 accredited journalists covering the Lakme India Fashion Week event, there were only six journalists to cover farmer suicides in Vidharbha. In that Fashion Week programme, the models were displaying cotton garments, while the men and women who grew that cotton were killing themselves at a distance of an hour's flight from Nagpur in the Vidharbha region. Nobody told that story except one or two journalists, locally.
Is this a responsible way for the Indian media to function? Should the media turn a Nelson's eye to the harsh economic realities facing over 75 per cent of our people, and concentrate on some ‘Potemkin villages' where all is glamour and show business? Are not the Indian media behaving much like Queen Marie Antoinette, who famously said that if people had no bread, they should eat cake.
No doubt, sometimes the media mention farmers' suicides, the rise in the price of essential commodities and so on, but such coverage is at most 5 to 10 per cent of the total. The bulk of the coverage goes to showing cricket, the life of film stars, pop music, fashion parades, astrology…

Riaz Haq said...

Here's the intro to an interview of Smita Narula, faculty director of the Center for Human Rights and Global Justice at New York University Law School, co-author of the report, "Every Thirty Minutes: Farmer Suicides, Human Rights and the Agrarian Crisis in India" as published by Democracy Now on Indian farmers plight:

A quarter of a million Indian farmers have committed suicide in the last 16 years—an average of one suicide every 30 minutes. The crisis has ballooned with economic liberalization that has removed agricultural subsidies and opened Indian agriculture to the global market. Small farmers are often trapped in a cycle of insurmountable debt, leading many to take their lives out of sheer desperation. We speak with Smita Narula of the Center for Human Rights and Global Justice at New York University Law School, co-author of a new report on farmer suicides in India.
---
SMITA NARULA: Good morning.

AMY GOODMAN: Talk about this report that you are just releasing today.

SMITA NARULA: Our major finding for this report is that all the issues that you just described are major human rights issues. And what we’re faced with in India is a human rights crisis of epic proportions. The crisis affects the human rights of Indian farmers and their family members in extremely profound ways. We found that their rights to life, to water, food and adequate standard of living, and their right to an effective remedy, is extremely affected by this crisis. Additionally, the government has hard human rights legal obligations to respond to the crisis, but we’ve found that it has failed, by and large, to take any effective measures to address the suicides that are taking place.

AMY GOODMAN: I mean, this number is unbelievable. Thirty—every 30 minutes, an Indian farmer commits suicide?

SMITA NARULA: And that’s been going on for years and years. And what these intense numbers don’t reveal are two things. One is that the numbers themselves are failing to capture the enormity of the problem. In what we call a failure of information on the part of the Indian government, entire categories of farmers are completely left out of the purview of farm suicide statistics, because they don’t formally own title to land. This includes women farmers, Dalit, or so-called lower caste farmers, as well as Adivasi, or tribal community farmers. In addition, the government’s programs and the relief programs that they’ve offered fail to capture not only this broad category, but also fail to provide timely debt relief and compensation or address broader structural issues that are leading to these suicides in the country....

Riaz Haq said...

Here's the intro to an interview of Smita Narula, faculty director of the Center for Human Rights and Global Justice at New York University Law School, co-author of the report, "Every Thirty Minutes: Farmer Suicides, Human Rights and the Agrarian Crisis in India" as published by Democracy Now on Indian farmers plight:

A quarter of a million Indian farmers have committed suicide in the last 16 years—an average of one suicide every 30 minutes. The crisis has ballooned with economic liberalization that has removed agricultural subsidies and opened Indian agriculture to the global market. Small farmers are often trapped in a cycle of insurmountable debt, leading many to take their lives out of sheer desperation. We speak with Smita Narula of the Center for Human Rights and Global Justice at New York University Law School, co-author of a new report on farmer suicides in India.
---
SMITA NARULA: Good morning.

AMY GOODMAN: Talk about this report that you are just releasing today.

SMITA NARULA: Our major finding for this report is that all the issues that you just described are major human rights issues. And what we’re faced with in India is a human rights crisis of epic proportions. The crisis affects the human rights of Indian farmers and their family members in extremely profound ways. We found that their rights to life, to water, food and adequate standard of living, and their right to an effective remedy, is extremely affected by this crisis. Additionally, the government has hard human rights legal obligations to respond to the crisis, but we’ve found that it has failed, by and large, to take any effective measures to address the suicides that are taking place.

AMY GOODMAN: I mean, this number is unbelievable. Thirty—every 30 minutes, an Indian farmer commits suicide?

SMITA NARULA: And that’s been going on for years and years. And what these intense numbers don’t reveal are two things. One is that the numbers themselves are failing to capture the enormity of the problem. In what we call a failure of information on the part of the Indian government, entire categories of farmers are completely left out of the purview of farm suicide statistics, because they don’t formally own title to land. This includes women farmers, Dalit, or so-called lower caste farmers, as well as Adivasi, or tribal community farmers. In addition, the government’s programs and the relief programs that they’ve offered fail to capture not only this broad category, but also fail to provide timely debt relief and compensation or address broader structural issues that are leading to these suicides in the country....

http://www.democracynow.org/2011/5/11/every_30_minutes_crushed_by_debt

http://www.chrgj.org/publications/docs/every30min.pdf

Riaz Haq said...

Pakistan's per capita income in 2011 increased to $1207 in nominal terms (not PPP) according to a report in Dawn:

ISLAMABAD, May 5: The per capita income in Pakistan rose by 9.5 per cent to $1,207 in fiscal 2010-11, the highest growth in recent past reflecting an improved well-being despite a slowdown in the economy.

As calculated by the federal bureau of statistics here on Thursday this could mean a jump of $105 per capita for 175.31 million population in 2010-11.

The per capita income is the average of the income between the very rich and the very poor and those in the middle. The economists define per capita income as Gross National Product at current market price in dollar terms divided by the country’s population.
---
The per capita income was $586 in 2002-03, which rose to $926 in 2006-07 and $1,085 in 2007-08 but now jumped to $1,207.

The size of the economy also peaked to Rs18.8 trillion for the financial year 2010-11, up by 22 per cent from Rs15.4 trillion in the corresponding period last year. But economic growth is projected to fall to 2.4 per cent by end June 2011 from a revised target of three per cent.

As a result of stagnation in economic growth in the past three years, the per capita income also did not witness any substantial growth in dollar term. But the real purchasing power of the people also eroded rapidly as inflation entered into double-digit making essential goods dearer for the poor people.

The per capita income in Pakistan has increased due to large inflow of home remittances from the overseas Pakistanis. This year the remittances were expected to cross the $10 billion mark, which would be the highest ever in the country’s history.

Riaz Haq said...

Pakistan Per capita income rises to $1254, according to Daily Times:

ISLAMABAD: Pakistan’s per capita income rose to $1,254 in 2010-11 from $1,073 during last year, showing tremendous increase of 16.9 percent, according to the Economic Survey of Pakistan. Enhancement in per capita income is mainly because of stable exchange rate as well as higher growth in nominal gross national product (GNP). Per capita real income has risen by 0.7 percent in 2010-11 against last year’s 2.9 percent. Real private consumption rose by 7 percent as against 4 percent attained last year, it added. However, gross fixed capital formation lost its strong growth momentum and real fixed investment growth contracted by 0.4 percent as against the contraction of 6.1 percent last year. Total investment has declined from 22.5 percent of GDP in 2006-07 to 13.4 percent of GDP in 2010-11. National savings rate has decreased to 13.8 percent of GDP in 2010-11 against last year’s 15.4 percent of GDP. Domestic savings also declined substantially from 16.3 percent of GDP in 2005-06 to 9.5 percent of GDP in 2010-11. The national budget for the fiscal year 2011-12 would be unveiled today (Friday). app

Riaz Haq said...

Talking about foreign aid, British aid will continue to pour into India at least until 2015. Having the world's largest population of poor in India continues to be a magnet for aid from governments like the British govt and private charities like Gates Foundation.

Here's a recent report:

London, June 15: British MPs have backed the controversial issue of giving aid to India till 2015 to ensure that it meets the millennium development goals, despite the fact that its economic growth is surging over the period of time.

In a report published by the House of Commons international development committee on Tuesday, a cross-party group of MPs have said that despite India's huge economic growth over the last 25 years, average per capita income is one-twentieth of that in Britain, and over 400 million people still live in poverty, The Guardian reports.

According to the United Nations' Millennium Development Goals (UN MDG) monitor, over a third of India's population live on less than 1.25 dollars a day.

The committee insisted that future aid to Indian should aim to improve sanitation, tackle malnutrition and challenge social exclusion.

Insisting that the committee had examined the arguments for and against aid, its Chairman Malcolm Bruce said: "The test of whether the UK should continue to give aid to India is whether that aid makes a distinct, value-added contribution to poverty reduction which would not otherwise happen. We believe most UK aid does this."


http://www.dailyindia.com/show/445434.php

Riaz Haq said...

Here's a piece by Nobel Laureate Amartya Sen on economic growth and quality of life in India and China:

It could, however, be asked why this distinction should make much difference, since economic growth does enhance our ability to improve living standards. The central point to appreciate here is that while economic growth is important for enhancing living conditions, its reach and impact depend greatly on what we do with the increased income. The relation between economic growth and the advancement of living standards depends on many factors, including economic and social inequality and, no less importantly, on what the government does with the public revenue that is generated by economic growth.

Some statistics about China and India, drawn mainly from the World Bank and the United Nations, are relevant here. Life expectancy at birth in China is 73.5 years; in India it is 64.4 years. The infant mortality rate is fifty per thousand in India, compared with just seventeen in China; the mortality rate for children under five is sixty-six per thousand for Indians and nineteen for the Chinese; and the maternal mortality rate is 230 per 100,000 live births in India and thirty-eight in China. The mean years of schooling in India were estimated to be 4.4 years, compared with 7.5 years in China. China’s adult literacy rate is 94 percent, compared with India’s 74 percent according to the preliminary tables of the 2011 census.

As a result of India’s effort to improve the schooling of girls, its literacy rate for women between the ages of fifteen and twenty-four has clearly risen; but that rate is still not much above 80 percent, whereas in China it is 99 percent. One of the serious failures of India is that a very substantial proportion of Indian children are, to varying degrees, undernourished (depending on the criteria used, the proportion can come close to half of all children), compared with a very small proportion in China. Only 66 percent of Indian children are immunized with triple vaccine (diphtheria/pertussis/tetanus), as opposed to 97 percent in China.

Comparing India with China according to such standards can be more useful for policy discussions in India than confining the comparison to GNP growth rates only. Those who are fearful that India’s growth performance would suffer if it paid more attention to “social objectives” such as education and health care should seriously consider that notwithstanding these “social” activities and achievements, China’s rate of GNP growth is still clearly higher than India’s.


http://www.nybooks.com/articles/archives/2011/may/12/quality-life-india-vs-china/

Riaz Haq said...

India's main planning body has said half a dollar a day is "adequate" for a villager to spend on food, education and health, according to the BBC:

Critics say that the amount fixed by the Planning Commission is extremely low and aimed at "artificially" reducing the number of poor who are entitled to state benefits.

There are various estimates on the exact number of poor in India.

Officially, 37% of India's 1.21bn people live below the poverty line.

But one estimate suggests the true figure could be as high as 77%.

The Planning Commission has told India's Supreme Court that an individual income of 25 rupees (52 cents) a day would help provide for adequate "private expenditure on food, education and health" in the villages.

In the cities, it said, individual earnings of 32 rupees a day (66 cents) were adequate.

The Planning Commission was responding to a direction from the court to update its poverty line figures to reflect rising prices.

India has been struggling to contain inflation which is at a 13-month high of 9.78%.

Many experts have said the income limit to define the poor was too low.

"This extremely low estimated expenditure is aimed at artificially reducing the number of persons below the poverty line and thus reduce government expenditure on the poor," well-known social activist Aruna Roy told The Hindu newspaper.

The Planning Commission also told the court that 360 million Indians are now being supplied with subsidised food and cooking fuel through the network of state-owned shops.

A World Bank report in May said attempts by the Indian government to combat poverty were not working.

It said aid programmes were beset by corruption, bad administration and under-payments.

http://www.bbc.co.uk/news/world-south-asia-14998248

Riaz Haq said...

Indian activists have dared the head of the country's planning body to live on half a dollar a day to test his claim that it is an adequate sum to survive, according to the BBC:

Last week the Planning Commission said the amount is "adequate" for a villager to spend on food, education and health.

But prominent campaigners Aruna Roy and Harsh Mander asked the panel chief, Montek Singh Ahluwalia, and members to either withdraw the figure or resign.

Officially, 37% of India's 1.21bn people live below the poverty line.

But there are various estimates of the exact number of poor in India and one suggests the true figure could be as high as 77%.

But the Planning Commission recently told India's Supreme Court that an individual income of 25 rupees (52 cents) a day would help provide for adequate "private expenditure on food, education and health" in the villages. In the cities, it said, individual earnings of 32 rupees a day (65 cents) were adequate.

Critics say this amount is extremely low and aimed at "artificially" reducing the number of poor. They argue that this will deprive millions of state benefits they would otherwise be entitled to.
Estimate ridiculed

"The right to food campaign challenges you and all the members of the Planning Commission to live on 25 rupees or 32 rupees a day till such time that you are able to explain to the public in simple words the basis of the statement that this amount is 'normatively adequate'," an open letter to the commission signed by Ms Roy, Mr Mander and various other activists said.

"If it cannot be explained then the affidavit [filed by the commission stating the figures] should be withdrawn or else you should resign."

The Planning Commission submitted the figures after the Supreme Court asked the government to update its poverty line figures to reflect rising prices.

The low figures, at a time when India has been struggling to contain inflation which is at a 13-month high of 9.78%, have been ridiculed not just by activists but also by many citizens.

Many experts have said the income limit to define the poor was too low.

And a World Bank report in May said attempts by the Indian government to combat poverty were not working.

It said aid programmes were beset by corruption, bad administration and under-payments.


http://www.bbc.co.uk/news/world-south-asia-15121304

Riaz Haq said...

Here's a piece from WSJ on poverty line in India:

In an affidavit filed to the Supreme Court, India’s Planning Commission shared new estimates on India’s poverty line, setting it at 965 rupees per month for people living in cities and at 781 rupees for people living in rural areas. This averages to about 32 rupees and 26 rupees per day, respectively, to spend on food, education and health.

While this was higher than the Planning Commission’s earlier estimates –which set the benchmark at 19 rupees a day for urban dwellers – it sparked a debate on how little people in India are expected to live on and on the limits of the country’s welfare system.

The poverty line matters because it determines how many people are eligible to government welfare schemes. Currently, this is capped at 37.2% of the population, a figure that is unlikely to change before the end of the year.

In an editorial titled “How little can a person live on?” in The Hindu newspaper on Friday, Utsa Patnaik said that the updated estimates “exposed how unrealistic ‘poverty lines’ are.” The author drew attention to costs people were meant to cover with that amount and noted that “even a child knows that working health cannot be maintained, nor necessities obtained, by spending so little.”

She questioned the methodology used to determine the figures: “The Planning Commission’s laughable estimates of the poverty line follow from a mistake in method that it made 30 years ago and has clung to ever since.” She questioned economists’ excessive reliance on price indices and the insufficient weight given to nutritional requirements.

“The method of indexation that is actually used has not kept constant the nutritional standard against which poverty is measured, but has lowered it continuously,” she said.

In an open letter, more than 25 experts including social economist Jayati Ghosh, Sukhdeo Thorat, the chairman of the University Grants Commission, and West Bengal’s former finance minister Ashok Mitra, slammed the government’s latest benchmark for measuring poverty.
----
Jug Suraiya, in an editorial titled “Rich man, poor man” in the The Times of India, noted that although India’s poverty line is very low, the country is also “poised to overtake Japan as the world’s third largest economy.” This, the author writes, highlights “an increasingly obvious reality: India is fast emerging as the richest poor country in the world.”
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Mr. Suraiya said that “the paradox is all the more cruel in that India’s poor…will grow even poorer and more numerous as the country’s prosperity increases.” He pointed at the root cause for this: “a criminally inefficient and inequitable system – or rather, non-system – of wealth distribution.”

In an editorial titled, “Which world do economists live in?” Faizur Rehman in The Asian Age also questioned the methodology used to the determine the poverty line and pointed at possible political motives underlying it: “The truth is that through the Planning Commission’s affidavit to the Supreme Court, the government has sought to grossly understate endemic poverty in India — perhaps to escape censure by the aam (common) voters in the next general election.”

“One wonders if members of the Planning Commission are aware of the cost of living in urban India,” he said. If the “Planning Commission feigns ignorance of this reality, it must be living in a time warp.”


http://blogs.wsj.com/indiarealtime/2011/10/01/what-they-said-india%E2%80%99s-poverty-line/

Riaz Haq said...

Here's a report on Benazir Income Support Program:

ISLAMABAD: The Benazir Income Support Programme (BISP) has proved to be highly effective programme for poverty alleviation and women empowerment considering its efficiency, technology based operations and transparency; the programme ought to be replicated in the other countries of the world as well.

According to a press release, Michal Rutkowski, Director Human Development South Asian Region, World Bank, said this during a meeting with Federal Minister and Chairperson of BISP, Farzana Raja while heading a delegation here at BISP Secretariat Wednesday.

Rutkowski said that the World Bank is proud of working with organization like BISP and appreciates its performance and reliability. While taking special interest in vocational training scheme of BISP, he said that the corporate sector and foreign employers may also invest in this particular initiative.

He termed Waseela-e-Taleem initiative of BISP, instrumental in the promotion of education, as similar initiatives have been proved successful in the other countries as well.

Earlier, Farzana Raja presented details of various initiatives of BISP for uplifting the living standards of millions of poor families across Pakistan. She said that one million out of school children of these poor families will be enrolled in the schools under Waseela-e-Taleem.

She said that BISP has employed state of the art technology in all of its mechanisms to facilitate its beneficiary in a more efficient and transparent manner. Farzana Raja said that BISP is seeking cooperation from various public and private organizations of the world working in the social sector to continue its various initiatives aiming at poverty alleviation in an effective manner.

She added further that BISP needs support of the World Bank for marketing BISP in the world especially for replication of such experiences in the other countries.


http://www.onlinenews.com.pk/details.php?id=185387

Riaz Haq said...

Top adviser says 70% of Indians are poor, according to IANS:

Debunking the government's claim that the number of poor in India has come down, a top adviser has claimed that around 70 percent of the country's 1.2 billion population is poor, and stressed the need for a multi-dimensional assessment of poverty.

"The government claim that poverty has come down is not valid... there is a need for a multi-dimensional assessment of poverty as around 70 percent of the population is poor," National Advisory Council member N.C. Saxena told IANS in an interview.

According to Saxena, the various poverty estimates the government relies on to assess the impact of developmental schemes are faulty as they fail to factor in the lack of nutritional diet, sanitation, drinking water, healthcare and educational facilities available to the people.

The former bureaucrat, who now is part of the NAC that reports to Congress president Sonia Gandhi, claimed that not only the National Sample Survey Organisation data is faulty, the ongoing Socio-Economic and Caste Census, which is expected to throw up the latest poverty estimates, is highly flawed.

"The NSSO data is unreliable and the SECC is highly flawed," said Saxena.

The National Advisory Council (NAC) was set up as an interface with civil society. The NAC provides policy and legislative inputs to the government with special focus on social policy and the rights of disadvantaged groups.

After the government faced flak over its latest poverty estimates, according to which anyone earning over Rs.28 per day in urban areas and Rs.26 per day in rural areas is not poor, Prime Minister Manmohan Singh said a multi-layered approach is required to assess poverty as the widely accepted Tendulkar committee report "is not all inclusive".

The government now plans to set up another expert panel to devise a new methodology to assess poverty levels in the country, said the prime minister.

The government recently revised its poverty estimates from earlier Rs.32 per day in urban areas and Rs.26 per day in rural areas based on 2011 prices, to the current estimate which is based on 2009 prices.

Using the Tendulkar panel report, the Planning Commission pegged poverty at 37.5 percent of the population.

Saxena said in reality out of about 200 centrally sponsored schemes, only 5 or 6 are linked to the poverty estimates, pegged at 37.5 percent by the Planning Commission.

Having a realistic assessment of poverty in not only crucial for the government to ensure that around Rs.80,000 crore that it spends on various welfare schemes annually reaches only the genuinely poor, it is also important for the United Progressive Alliance which hopes to roll out the ambitious National Food Security Bill, which aims to provide subsidised rations to around 65 percent of the 1.2 billion population some time next year.


http://in.finance.yahoo.com/news/70-percent-india-poor-top-055810676.html

Riaz Haq said...

Here's an AP report on Benazir Income Support program in Pakistan:

Clutching photocopied ID cards in bony fingers, a roomful of Pakistan's poorest women sit on gray plastic chairs and wait in silence for something many have never experienced: a little bit of help from the government.

It comes in the form of a debit card that is topped up with the equivalent of $30 every three months, enough to put an extra daily meal on the table, buy a school uniform or pay for medical treatment in a country where soaring food and fuel costs are hurting millions who already live hand-to-mouth.

The program is something of a success story for a government widely seen as corrupt and inefficient, as well as for international donors that help implement and fund it. But the very need for the scheme highlights the poverty stalking a country whose stability is seen as key to the fight against Islamist extremism.

Other cash-transfer programs in Pakistan have been plagued by graft and allegations that only supporters of the party in power received the funds. Many feared this program, named after Benazir Bhutto, the late wife of President Asif Ali Zardari, would go the same way.

But that hasn't happened, at least not significantly. The Benazir Income Support Programme is modeled on similar efforts in Africa and South America, part of a quiet revolution in the way countries and development agencies are helping the poor. Initial concerns that recipients would fritter away the money have proven unfounded, and giving cash is now accepted as a vital and cost-effective aid tool.

"I spend the money on my kids, what else would I do?" said Rifat Parveen, a mother of five who sometimes has to serve only bread and boiled chili peppers for the evening meal. "Even if a poor person gets 10 rupees (5 cents), he or she will be grateful."

When a woman is called, she goes to a room where her identity is checked against an electronic database and her thumb print taken electronically. A bank employee then gives her the card — and a crash course in how to use it — before she returns to her village.

As they do elsewhere in the world, women in Pakistan must receive the money on behalf of their families because research shows they spend it more responsibly than men do. They must also first obtain a valid identity card to be eligible. Both requirements have been credited with pushing women, discriminated against in Pakistan, a little into the mainstream.


http://www.foxnews.com/world/2012/04/17/in-pakistan-welfare-scheme-shows-signs-success/

Riaz Haq said...

Here's an ET story on poverty decline in Pakistan:

Their biggest challenge at the moment is to explain how nearly seven million Pakistanis have come out of the vicious cycle of poverty.

According to the survey, the incidence of poverty has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011. It was conducted by a committee constituted to calculate the incidence of poverty on the basis of Pakistan Social and Living Standards Measurement Survey 2010-11.

“The biggest challenge in front of us is how to explain this figure to the masses and economists when the economy grew at an average rate of 2.6 per cent and average inflation remained above 15 per cent during the last four years,” a member of the committee told The Express Tribune requesting anonymity due to political sensitivity attached to the figure.

He said poverty declined to slightly over 12 per cent with sharp declines in both rural and urban poverty. He said rural poverty declined more than urban poverty but, “the behaviour was the same and consistent with previous years’ results.”

In 2007-08 when the Pakistan Peoples Party-led coalition government took over, poverty had been assessed at 17.2 per cent. But the government decided not to release the figure saying poverty was at 35-40 per cent. It shared 40 per cent figure with Friends of Democratic Pakistan in its maiden meeting held in Tokyo.

It is facing the same dilemma exactly after four years, as its own people are now telling that poverty has declined to 12 per cent.

According to the United Nations Multi Dimensional Poverty Index, half of the country’s population lives below the poverty line.
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In 2007-08 the country’s estimated population was 164.7 million. By that account in 2008 as many as 28.3 million people lived below the poverty line. In 2010-11, the estimated population was 175.3 million and around 21.5 million people were in abject poverty.

The committee member said that poverty has been worked out on the basis of consumption method. According to this method, if a person takes 2,350 calories per day that costs him slightly over Rs1,700 per month that person is taken as above the poverty line.

The official said that the committee has not formally submitted the poverty report to the Planning Commission, but it is expected to submit the report over the next couple of weeks. However, the committee has already shared its findings with the commission.

A senior government official, who also wished to remain anonymous, said that the concerned authorities were considering the poverty figure and framing their mind whether to release it or not. It is not yet clear whether the government would publish the poverty estimates in the Economic Survey of Pakistan 2011-12.

The committee member, while giving justifications for the decline in poverty despite harsh ground realities, said that poverty declined because of higher support price of major crops, especially wheat, healthy trend in inflows of remittances and impact of assistance provided by both the government and private sectors in the flood affected areas of the country.


http://tribune.com.pk/story/374384/solace-among-confusion-5-decline-in-poverty-surprises-govt/

Riaz Haq said...

Here's Daily Times on BISP program:

ISLAMABAD: Rt Honorable Justine Greening, the UK’s Secretary of State for International Development, has congratulated Federal Minister and Benazir Income Support Programme (BISP) Chairperson Farzana Raja in turning BISP into an impressive and successful programme of social sector.
She particularly appreciated the fact that by adopting technology based payment mechanisms; the complex procedure of disbursements to millions of BISP beneficiaries has been made simpler, efficient and most transparent. She said this during her meeting with Farzana Raja here at BISP Secretariat.
Justine Greening was leading a delegation consisting of Mark Richardson, DFID Minister’s Private Secretary, Victoria Crawford, DFID Minister’s Special Adviser, Moazzam Malik, Director, George Turkington, Head of DFID Pakistan, Alexis Ferrand, Head of Economic Growth and Fatime Naqvi, Team Leader Social Cash Transfers.
Justine Greening also acknowledged the fact that BISP’s innovative technology in the form of Benazir Debit Card and Mobile Phone Banking etc has been introduced to the lower segments of society which is quite remarkable achievement.
She said, “The UK and Pakistan have a unique bond, tied together by family, friendship, trade, history, and culture. I look forward to continuing to work closely together as partners for the long term, to help lift millions of people in Pakistan out of poverty.”
Earlier, the BISP chairperson while thanking the continuing support of British government informed the delegation about various interventions of the programme aiming at poverty alleviation, women’s empowerment and to make Pakistan a social welfare state. She said that the government is focusing on targeted subsidies moving away from the general subsidies and BISP is playing a pivotal role in this regard.
Farzana Raja on the occasion apprised the members of the delegation that BISP is contributing significantly in achieving the Millennium Development Goals (MDGs) of United Nations regarding women’s empowerment and education.
It is a “one-window programme” providing various services to the beneficiary families simultaneously, she added.
She said that targeting the most deserving families was a big challenge, but with the help of the first ever nation-wide poverty census, BISP has accurately identified more than 7.3 million families.
She said that BISP is regarded as an apolitical programme as its act was unanimously passed by all the political parties in both Houses of parliament. Farzana Raja said that the use of the state of the art modern technology by BISP has proved to be a great help in enhancing the transparency employed in the programme further. She said that despite the difficult ground situation, BISP has completed countrywide poverty survey including in the region of FATA.She added that BISP is an asset of all Pakistanis and serving people without any discrimination or any other consideration.


http://www.dailytimes.com.pk/default.asp?page=2013\01\23\story_23-1-2013_pg7_18

Riaz Haq said...

Here are some excerpts of an interesting story published in The Hindu:


Can anyone really live on Rs. 26 a day, the income of the officially poor in rural India? Two youngsters try it out.

Late last year, two young men decided to live a month of their lives on the income of an average poor Indian. One of them, Tushar, the son of a police officer in Haryana, studied at the University of Pennsylvania and worked for three years as an investment banker in the US and Singapore. The other, Matt, migrated as a teenager to the States with his parents, and studied in MIT. Both decided at different points to return to India, joined the UID Project in Bengaluru, came to share a flat, and became close friends.

The idea suddenly struck them one day. Both had returned to India in the vague hope that they could be of use to their country. But they knew the people of this land so little. Tushar suggested one evening — “Let us try to understand an ‘average Indian', by living on an ‘average income'.” His friend Matt was immediately captured by the idea. They began a journey which would change them forever.

To begin with, what was the average income of an Indian? They calculated that India's Mean National Income was Rs. 4,500 a month, or Rs. 150 a day. Globally people spend about a third of their incomes on rent. Excluding rent, they decided to spend Rs. 100 each a day. They realised that this did not make them poor, only average. Seventy-five per cent Indians live on less than this average.

The young men moved into the tiny apartment of their domestic help, much to her bemusement. What changed for them was that they spent a large part of their day planning and organising their food. Eating out was out of the question; even dhabas were too expensive. Milk and yoghurt were expensive and therefore used sparingly, meat was out of bounds, as were processed food like bread. No ghee or butter, only a little refined oil. Both are passionate cooks with healthy appetites. They found soy nuggets a wonder food — affordable and high on proteins, and worked on many recipes. Parle G biscuits again were cheap: 25 paise for 27 calories! They innovated a dessert of fried banana on biscuits. It was their treat each day.
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Living on Rs.100 made the circle of their life much smaller. They found that they could not afford to travel by bus more than five km in a day. If they needed to go further, they could only walk. They could afford electricity only five or six hours a day, therefore sparingly used lights and fans. They needed also to charge their mobiles and computers. One Lifebuoy soap cut into two. They passed by shops, gazing at things they could not buy. They could not afford the movies, and hoped they would not fall ill.

However, the bigger challenge remained. Could they live on Rs. 32, the official poverty line, which had become controversial after India's Planning Commission informed the Supreme Court that this was the poverty line for cities (for villages it was even lower, at Rs. 26 per person per day)?
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... Do we really need that hair product or that branded cologne? Is dining out at expensive restaurants necessary for a happy weekend? At a larger level, do we deserve all the riches we have around us? Is it just plain luck that we were born into circumstances that allowed us to build a life of comfort? What makes the other half any less deserving of many of these material possessions, (which many of us consider essential) or, more importantly, tools for self-development (education) or self-preservation (healthcare)?

We don't know the answers to these questions. But we do know the feeling of guilt that is with us now. ....

....And above all — in Matt's words — that empathy is essential for democracy.


http://www.thehindu.com/opinion/columns/Harsh_Mander/barefoot-the-other-side-of-life/article2882340.ece

Riaz Haq said...

Here's an excerpt of a World Bank report released recently:

while the extreme poor in SSA represented only 11 percent of the world’s total in 1981, they now account for more than a third of the world’s extreme poor (figure 3). India contributes another third (up from 22 percent in 1981) and China comes next contributing 13 percent (down from 43 percent in 1981).

http://www.worldbank.org/content/dam/Worldbank/document/State_of_the_poor_paper_April17.pdf

Riaz Haq said...

Here's The Economist on ending poverty:

IN HIS inaugural address in 1949 Harry Truman said that “more than half the people in the world are living in conditions approaching misery. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of those people.” It has taken much longer than Truman hoped, but the world has lately been making extraordinary progress in lifting people out of extreme poverty. Between 1990 and 2010, their number fell by half as a share of the total population in developing countries, from 43% to 21%—a reduction of almost 1 billion people.
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Starting this week and continuing over the next year or so, the UN’s usual Who’s Who of politicians and officials from governments and international agencies will meet to draw up a new list of targets to replace the Millennium Development Goals (MDGs), which were set in September 2000 and expire in 2015. Governments should adopt as their main new goal the aim of reducing by another billion the number of people in extreme poverty by 2030.

Nobody in the developed world comes remotely close to the poverty level that $1.25 a day represents. America’s poverty line is $63 a day for a family of four. In the richer parts of the emerging world $4 a day is the poverty barrier. But poverty’s scourge is fiercest below $1.25 (the average of the 15 poorest countries’ own poverty lines, measured in 2005 dollars and adjusted for differences in purchasing power): people below that level live lives that are poor, nasty, brutish and short. They lack not just education, health care, proper clothing and shelter—which most people in most of the world take for granted—but even enough food for physical and mental health. Raising people above that level of wretchedness is not a sufficient ambition for a prosperous planet, but it is a necessary one.

The world’s achievement in the field of poverty reduction is, by almost any measure, impressive. Although many of the original MDGs—such as cutting maternal mortality by three-quarters and child mortality by two-thirds—will not be met, the aim of halving global poverty between 1990 and 2015 was achieved five years early.

The MDGs may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution.

Poverty rates started to collapse towards the end of the 20th century largely because developing-country growth accelerated, from an average annual rate of 4.3% in 1960-2000 to 6% in 2000-10. Around two-thirds of poverty reduction within a country comes from growth. Greater equality also helps, contributing the other third. A 1% increase in incomes in the most unequal countries produces a mere 0.6% reduction in poverty; in the most equal countries, it yields a 4.3% cut.

China (which has never shown any interest in MDGs) is responsible for three-quarters of the achievement. Its economy has been growing so fast that, even though inequality is rising fast, extreme poverty is disappearing. China pulled 680m people out of misery in 1981-2010, and reduced its extreme-poverty rate from 84% in 1980 to 10% now.

That is one reason why (as the briefing explains) it will be harder to take a billion more people out of extreme poverty in the next 20 years than it was to take almost a billion out in the past 20. Poorer governance in India and Africa, the next two targets, means that China’s experience is unlikely to be swiftly replicated there......


http://www.economist.com/news/leaders/21578665-nearly-1-billion-people-have-been-taken-out-extreme-poverty-20-years-world-should-aim

Riaz Haq said...

Here's a Dawn story on a World Bank study of poverty reduction in Pakistan:

A new World Bank study says Pakistan has demonstrated that it can reduce poverty even at relatively low rates of growth of 3.2 to 4.5 per cent but not at growth of GDP per capita of 1pc, noting that it is struggling to sustain that growth.

“International comparisons suggest that Pakistan has been a good performer in turning growth into poverty reduction. Countries that are more successful in reducing poverty tend to be better at generating sustained growth, however the issue for Pakistan will thus be sustaining growth,” according to World Bank policy note on poverty in Pakistan.

The observation that Pakistan is successful in reducing poverty when GDP grows but cannot sustain that growth has two important policy implications. With more growth interruptions, an adequate social protection system becomes more important.

The second implication is that a renewed effort to address the problem that work against sustained growth would be well justified for faster poverty reduction.

This effort should lead to policy priorities for poverty reduction different from those in countries better able to sustain growth but unable to convert that growth into rapid poverty reduction, it says.

The poor are vulnerable to shocks — be they of natural disasters, health or macro policy. An adequate system would ensure that when shocks hit, the poor and vulnerable can still maintain the investments they need to increase their incomes and their children’s welfare.

Describing safety net programme like Benazir Income Support Programme as no substitute for sustained growth, the study says due to stop-go growth and too many natural disasters, Pakistan has to ensure a strong safety net programme as part of an overall poverty reduction strategy.

The study estimates that in Punjab, the largest province, where it says data appears more reliable, poverty has fallen considerably from 33.5pc in 2001-02 to 16.4pc in 2007-08, after adjusting for higher food prices.

This improvement was driven largely by increasing returns in the non-farm sector, in both urban and rural areas.

Over the period, the growth of per capita consumption of the bottom 40pc of Punjab’s population exceeded GDP per capita growth. Subsequently, over 2007-08, 2010-11, per capita real consumption growth in Punjab was stagnant, and the equality of opportunity for primary education completion rates seemed to improve but alongside a slowdown in the rate of improvement in indicators for water and sanitation and for primary enrolment.

The report says that the last three years have seen sizeable differences in the improving social indicators. Sindh has been lagging in its primary completion rates, and Khyber-Pakhtunkhwa has been lagging in coverage of improved sanitation.

According to the report, opportunity is growing in both urban and rural areas for education and sanitation, which is a very positive sign. Urban children have more absolute opportunity than rural children, but the rate of growth in rural areas is growing faster.


http://dawn.com/news/1030803/wb-hopeful-pakistan-can-reduce-poverty

http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/07/17/000356161_20130717144219/Rendered/PDF/795720BRI0SASE0ox0377381B00PUBLIC00.pdf