Farooq Awan

The national poverty line for FY2024-25 has been updated to Rs8,484 per adult equivalent per month under the revised estimation framework, according to the Preliminary Report on Poverty Estimation 2024-25 issued by the Ministry of Planning, Development and Special Initiatives.

The report states that individuals whose monthly consumption expenditure falls below Rs8,484 per adult equivalent are classified as living below the poverty line in FY2024-25. The updated threshold reflects adjustments in consumption patterns and price changes recorded during the review period.

According to the document, the poverty line is calculated on the basis of a reference consumption basket that incorporates essential food and non-food items. The estimation uses adult equivalence scales to adjust household consumption for differences in age and gender composition.

The report explains that the revised poverty line accounts for regional price variations across provinces and between rural and urban areas. Price adjustments are applied using official consumer price indices to maintain comparability with previous survey rounds.

The poverty estimation is based on data drawn from the Household Integrated Economic Survey (HIES). The methodology ensures that consumption expenditure is standardized across households using adult equivalent units before applying the poverty threshold.

In 2018-19, poverty calculations were based on the then-prevailing poverty line adjusted for price levels of that year. For FY2024-25, the poverty line was recalibrated to Rs8,484 to reflect updated consumption requirements and inflationary adjustments over the six-year period.

The document outlines that the revised threshold forms the basis for calculating the national poverty headcount ratio of 28.9% for FY2024-25. Provincial, rural and urban poverty rates are also derived using the same updated poverty line and methodology.

The report further notes that the estimation framework applies a consistent approach to enable comparison between 2018-19 and 2024-25. While the poverty line value has changed due to price adjustments and updated consumption baskets, the core methodology remains aligned with previous practices.

The poverty line represents the minimum monthly consumption expenditure required to meet basic needs as defined in the survey framework. The Rs8,484 threshold is expressed per adult equivalent terms to standardize measurement across different household sizes and compositions.

The Preliminary Report on Poverty Estimation 2024-25 presents the updated poverty line as a central component of the latest poverty assessment, providing the benchmark against which household consumption data for FY2024-25 are evaluated.

Credit: INP-WealthPk