ISLAMABAD: The Benazir Income Support Programme (BISP) has been ranked #1 among globally acclaimed unconditional cash transfer programmes through a Revised Proxy Means Test (PMT) formula.
The simulated results show that using the revised PMT formula, it would substantially increase the target performance as 60.2 percent beneficiaries would be from the bottom quintile, as compared to 48 percent from the old formula of 2010 while 87.5 percent would be from the bottom two quintiles as compared to 75 percent previously – ie a remarkable increase of 12.5 percentage points.
This is a simulated result but once the National Socio Economic Registry update is completed and the administrative data validates this percentage, it would bring BISP to the top rank among globally acclaimed unconditional cash transfer programmes.
BISP Chairperson Member of National Assembly Marvi Memon termed it a great success for BISP. She said, “We’ve been continuously putting efforts to ensure transparency in the programme and becoming the pride of Pakistan. I am pleased that the efforts have borne fruit and we have moved from being number five to number one.”
She further hoped that the increased target performance will lead to enhanced and focused poverty eradication efforts.
In 2016, BISP started an extensive consultative process, with the support of global experts, which led to the revision of the PMT formula with several additional features to improve its performance. These features included improved welfare indicators, excluding non-verifiable indicators, location and interaction effects.
BISP Secretary Omar Hamid Khan said that he considers it as yet another success of BISP team while sharing that “the entire staff and management has continuously put efforts for the betterment of the BISP family”.
He further added that this exercise shows how BISP is engaged in testing all its efforts through piloting and simulations before field experience to remove any policy glitches in future.
The revised PMT formula bases poverty measures on expenditure per adult equivalent since it takes into account household demographic structures in the calculation of the welfare aggregate.
Moreover, the previous PMT formula included indicators of household heads’ educational attainment and children’s enrollment in schools that are not easily observable and verifiable. Hence, the updated formula excludes them and includes an indicator of adults’ literacy, which is less prone to measurement error and misreporting.
Further, it has been observed that geographical location is an important determinant of poverty. To capture these effects, the PMT formula now includes indicators of urban status, according to the definition used by the Pakistan Bureau of Statistics. The formula also includes indicators of agro-climatic zones of Pakistan. This is expected to reduce the “rural bias” which was observed in the previous formula.
The previous formula was allocating the same weight to demographics, dwelling characteristics, durables and productive assets in the calculation of the PMT score for all households of Pakistan, irrespective of their characteristics or location. The revised formula incorporates interactions between urban status and agro-climatic zones and these interactions are significantly better predictors of consumption.
This sets BISP as being an international best practice in safety nets. MNA Marvi Memon termed it a goal of the Pakistan Muslim League-Nawaz government. She said that the more accurate the targeting, the more credible the social safety. She further said, “I am pleased that our endeavour to raise BISP’s credibility to serve the real poor people versus the political poor people has been established worldwide with this accomplishment.”
She hoped that the real poor people of Pakistan have finally been recognised.
Published in Daily Times, March 28th 2018.