calculating the proportion of individuals whose per capita consumption aggregate is lower than the international poverty line. In general, the GNI per capita for all countries is below 10,000 dollars, ranging from 1,700 dollars to about 9,700 dollars. Maldives and Sri Lanka have the highest and second highest GNI per capita, while Afghanistan and Bangladesh have the lowest. International poverty rates also vary considerably in the region, largely in line with the patterns observed in the GNI, except for India. In Sri Lanka and Bhutan, the international poverty rate is less than 3 percent. Pakistan and Maldives have an international extreme poverty rate in the range of 3 to 10 percent. Nepal and Bangladesh have the highest international poverty rate in the range of 14 to 19 percent. India is one of the few countries at the global level for which the World Bank traditionally reports international poverty rates by urban and rural regions – rural and urban India have almost 24.8 percent and 13.4 percent of the population living below the international extreme poverty line, respectively.<sup>8</sup>

**<u>Table 3. International extreme poverty headcount rate for South Asian countries</u>**

|**Country**|**Year**|**International**<br>**poverty rate**<br>**(%)**|**Number of**<br>**extreme poor**<br>**(in millions)**|**GNI per capita in**<br>**USD 2011 PPP**|
|---|---|---|---|---|
|Afghanistan|2011|n.a.||$1,731.70|
|Bangladesh|2010|18.51|27.49|$2,783.56|
|- Rural|2010|22.7|24.89||
|- Urban|2010|6.7|2.60||
|Bhutan|2012|2.17|0.01|$6,452.00|
|India|2011/12|21.56|239.1|$4,594.20|
|- Rural|2011/12|24.84|196.7||
|- Urban|2011/12|13.38|42.39||
|Maldives|2009|7.25|0.02|$9,714.40|
|Nepal|2010|14.89|4.20|$2,053.40|
|Pakistan|2011/12|7.93|10.26|$4,516.50|
|Sri Lanka|2012/13|1.92|0.38|$9,121.40|

Source: Authors’ own estimates based on South Asia Harmonized Micro Dataset (SARMD). GNI per capita in USD 2011 PPP obtained from the World Development Indicators (WDI).

According to official figures, the international poverty rate is the highest in India among the eight countries in the region. India also has the largest number of extreme poor among these countries – about 268 million – which is about 28 percent of the global extreme poor.<sup>9</sup> By far, most extreme poor of India are from the rural areas. Bangladesh has the second highest number of international extreme poor in South Asia (28 million) and Pakistan the third highest number (14 million).

But India’s high rate of poverty may partly reflect methodological differences in the way in which countries construct their national consumption aggregates. The higher poverty rate in India compared to Bangladesh, for instance, is inconsistent with the GNI per capita metric, which is almost $2,000 higher for India than Bangladesh. This suggests that differences in the way in which consumption aggregates are constructed in each country might contribute to the total error. To study how the national consumption aggregates are constructed, we look at the latest rounds of household surveys available for these countries.

> 8 The other countries for which international poverty rates are reported separately for urban and rural areas are China and Indonesia.

> 9 This proportion is calculated using PovcalNet data extracted on September 15, 2017.

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