Economic Growth and Poverty Reduction in Nepal in last decade Dr Shiva Sharma General Secretary Nati

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Economic Growth and Poverty Reduction in Nepal
in last decadeDr Shiva SharmaGeneral
SecretaryNational Labour Academy

• Nov 20, 2007

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Table 1 Trends in the Incidence of Poverty

• Source NESAC (1998). CBS
• Differences in Poverty line over surveys
• Comparable data in NLSS I and II
• Difficulty in disaggregated analysis of poverty

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Table 2 Contribution of Growth and
Redistribution of Income in Poverty

• Source Computed from the NLSS II poverty
  results.
• Decomposition
• economic growth and -24.1
• income distribution 13.2
• Had income distribution remained neutral, the
  decline in poverty would have been more than 24
  percentage points.
• Had there been no growth and income distribution
  only worsened as shown by the Gini coefficient,
  absolute poverty would have gone up to 44 per
  cent
• Urban areas, inequality not a deterent
• Had income distribution not worsened in the rural
  areas, the decline in poverty in rural areas
  would have been at least 17 percentage points

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Table 3 Gini Coefficients of Income
Distribution Patterns
Income Distribution Pattern
Source NESAC 1998, NLSS II, CBS.

• inequality growing over the years
• rural inequality lower than urban
• but rural inequality growing faster

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Inequalityhousehold incomes
Inequalityhousehold incomes
Source NLSS I and NLSS II, CBS. Inequality
measured in terms of share of income of the
poorest and the richest households has worsened
in the NLSS II survey year 2004 compared to the
NLSS I survey year 1996. The Lorenz curve has
bulged to the right.
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Table 4 Share of Remittance in Household Income
by Consumption Quintile

• Source NLSS II, CBS (2004).
• Poorest 33
• Richest 40 of income
• Poorest might not be having access to external
  market
• Will be illuminating to learn
• who received and those households who did not
  receive remittance, and
• who received lower amount of remittance than
  those who received higher amount.

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• On the whole, the following points reveal the
  accentuation of inequality in 2004 as compared to
  1996 info in tables below
• contraction of the size of operational land
• increase in the share of rented-in land
• fall in the consumption share of the poorest 20
  per cent
• slower growth of income vis-a-vis consumption
• inequality in the receipt from remittances
• a sharper fall in employment share in agriculture
  and a modest increase in non-agricultural
  employment
• fall in employment share of longer duration

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Table 5 Indicators of Economic Activities and
Inequality over Two NLSS
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Thank You