[skip to content]

Unique pilot schemes assess impact of basic income schemes on India’s rural poor

10 May 2013

Guy Standing of SOAS, University of London has been working with SEWA, the Indian Self-Employed Women’s Association, to investigate the effect of unconditional cash transfers on India’s rural villages.

The schemes have helped convert the Indian government to cash transfers, and it is planning to make them the heart of their social protection policy, rolling out new pilots this year.

Professor Standing designed three overlapping pilot schemes to investigate how unconditional cash grants could work in India. SEWA implemented the projects and, since 2010, over 6,000 individuals have been receiving monthly cash grants, including all men, women and children of nine villages in Madhya Pradesh.

The schemes have been subjected to rigorous evaluation by Professor Standing in order to determine the effects on such crucial developments as living conditions, including sanitation, health, nutrition, schooling, work, labour and production, consumption, savings and debt, women’s status and decision-making roles, and the effects for socially disadvantaged groups, including scheduled castes and the disabled.

The four-year collaboration between Professor Standing of SOAS’ Department of Development Studies and SEWA has received funding from UNICEF and UNDP.

Professor Standing said: “While cash grants – or basic income grants – must be seen as supplementing public social services, they can be enormously powerful in liberating people from severe constraints. The pilots are unique in that the income grants have been provided on a regular basis to each individual, man, woman and child, and they have been unconditional. We have also been testing whether they are more effective in places where there is a Voice organisation – where SEWA is operating – than where there is not. But we have stayed out of the villages during the experiments, and have given no guidance on how people should spend the money. They know what to do much better than we would.”

Renana Jhabvala, who is coordinating SEWA’s involvement, added, “These cash grants have improved the independence and status of women in the villages and we have been particularly pleased to see how they have assisted older women, who are often neglected terribly in rural India.”  

A public conference, at which the evaluations of the pilots will be presented, will take place at the Indian International Centre Conference Hall, New Delhi, on May 30-31, 2013.

The Minister of Rural Development, Jairam Ramesh, will open the Conference, along with Montek Singh Ahluwalia, Deputy Chair of the National Planning Commission. The Minister is also the Cabinet Minister in charge of rolling out cash transfers across India.  Other very senior government and international agency dignitaries, including representatives from the UN and World Bank, will also be participating. Officials from various government departments, academics and social activists are expected to attend.

Among the many empirical findings are the following:

  • The basic income grants have led to significant improvements in nutrition and health;
  • Villagers have improved their health by taking medicines more regularly;
  • School attendance and performance have improved, and there has been increased use of private tuition;
  • Production and economic activity have increased;
  • Indebtedness has declined, and savings have increased, providing liquidity for dealing with shocks and hazards;
  • Among the groups most benefiting have been those with disabilities.  

 

Cash Transfer Film