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Poor or Poverty

Generally, a person who is unable to satisfy his basic food and non-

food(education ,health ,housing ..etc.) requirements can be

considered as a ‘Poor’ and when poor exists poverty exists.

Statistical definition

Persons whose per capita expenditure value lies below the poverty line are considered ‘Poor’ according to the definition of official poverty line.

Official poverty line of Sri Lanka• The poverty line established on HIES 2002 data by the DCS as the Official Poverty Line

(OPL) for Sri Lanka in June 2004.

• The minimum amount of expenditure per person required to satisfy his/her basic food and non-food expenditure is defined as the ‘Poverty Line’

• The OPL is fixed at a specific welfare level that is a person who meets a certain minimum nutritional intake (2030 kilocalories per capita per day) to compare over time with household food and non- food consumption and expenditure data. Hence call as consumption poverty line.

• The Cost of Basic Needs (CBN) approach which is internationally recognized method was used to determine its value.

• Therefore, OPL is the minimum requirement of nutrients plus the other basic needs( Education, Health, Housing, Clothing etc.)

• The year 2002 value of the OPL which was Rs. 1423 real total expenditure per person per month is updated for the price movements through the Colombo Consumer Price Index (CCPI) calculated monthly by the DCS.

Poverty Headcount Ratio by Survey Period

1990/91 1995/96 2002 2006/07 2009/10 2012 20150

5

10

15

20

25

30

35

26.1%(1/4)

28.8%

22.7%

15.2%

8.9%(1/11) 6.5%

(1/15)

HCR(

%)

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Mean household Income and Expenditure Distribution by

Survey Periods

2006/07 2009/10 20120

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

26286

36451

46207

22952

31331

40887

Mean Household Income Mean Household Expenditure

Inco

me

(Rs.

)

2006/07 2009/10 20120

5000

10000

15000

20000

25000

30000

35000

16735

23746

30400

16640

24509

30051

Median Household IncomeMedian Household Expenditure

Expe

ndit

ure(

Rs.)

Median household Income and Expenditure Distribution

by Survey Periods

Food and Non-Food Ratio by Survey Periods

1990/91 1995/96 2002 2006/07 2009/10 20122025303540455055606570

64.6

54.4

44.5

37.642.3

39.435.4

45.6

55.5

62.457.7

60.6

Food Ratio Non-Food Ratio

Survey Periods

Perc

enta

ge(%

)

Average Household Expenditure by selected non food groups by Survey periods

Fuel and light (Rs.)

Health and Personal care

(Rs.)

Transport (Rs.)

Communica-tion(Rs.)

Education(Rs.)

2006/07 1042 980 1862 538 632

2009/10 1278 1429 2317 755 1018

2012/13 1724 2228 3607 891 1430

250

750

1250

1750

2250

2750

3250

3750 2006/07 2009/10

2012/13

Valu

e (R

s.)

Percentage Share of Household Income by Social Economic Groups

1995/96 2002 2006/07 2009/10 20120

10

20

30

40

50

60

5.4 4.8 4.6 4.5 4.4

44.542.4 40.7 41.4 42.1

50.352.8 54.7 54.1 53.5

Poorest 20% Middle 60% Richest 20%

Survey Period

Perc

enta

ge(%

)

Impact Analysis of Social Protection Program

HIES survey collects the social protection information and intend to discover mainly the social assistance and social insurance information. The areas of the social protection covered by HIES in 2012/13 are follows;

Social Insurance programs Social Assistance Programs

Pension Payment Disability / relief payments Health medical aids Compensation Insurance

Samurdhi program Elderly payment Educational & scholarships School food program Triposha food program Disaster relief assistant Foods and other commendations Fertilizer & Other subsidies

Impact of Social protection programs on poverty measures simulating the absence of the program

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Poverty Headcount Ratio

Indicator 6.5Indicator without listed transfer All social protection 9.2 All social insurance 8.2 All social assistance 7.5 Samurdhi 6.9 Fertilizer subsidies 6.8

The total social protection transfer programs have reduced the poverty from 9.2% to 6.5 %. This social protection transfers lifted 2.7 % poor people above poverty line.

In the absence of pension, poverty headcount indicator would increase to 8.2 %

In the absence of Samurdhi, poverty headcount indicator would increase to 6.9 %