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Experimenting Unconditional Basic Income
in India
Evidence from SEWA’s Pilot Study
What is SEWA?
SEWA is a trade union of women workers in the informal sector
About SEWA
Founded in 1972, It has 1.7 million members across 9 states in India
SEWA’s main objective is full employment, self reliance and social security of women workers from the informal economy
It unionises home-based workers, construction workers, forest workers, street vendors, domestic workers, etc.
It organises workers locally, addresses their immediate needs and rights, and also does policy advocacy with the state
The Basic Income experiment was conducted in the state of Madhya Pradesh
Location of Madhya Pradesh where the Basic Income experiment was conducted
Why is SEWA interested in Unconditional Basic Income?
CLOGGED PIPES and Poor delivery of Welfare
Why is SEWA interested in Unconditional Basic Income?
Provides an income to invisible and unpaid workers who contribute to economy – women, children, disabled and old people working at home
Cost-effective. To reach one rupee to poor, India spends Rs. 3.65 in administrative costs. (India Planning Commission figures)
Most efficient method of delivering welfare. No leakages
Enhances liquidity of the poor households: liquidity increases consumption of food, regularity of medicines and reduces small borrowings.
Stimulates local economic growth
Allocation Vs Utilization ratio of Government social spending will be very high
Why Unconditional?
• Conditionalities are the biggest obstacle to the welfare reaching the intended beneficiary
• Eliminates delays, long procedures, middlemen and corruption at the delivery end.
• Global research showing that Conditional CT, if they succeed at all, can achieve narrow objectives, but Unconditional CTs have much broader impact on the development needs of people in the long-run.
• Conditionalities are difficult to implement. They leave all the discretion in the hands of the bureaucracy.
SEWA’s Unconditional BI Experiment
Unconditional
Monthly transfer
IndividualThrough Bank accounts
Universal
Main Features
Main Features
20 Villages chosen: 10 villages where SEWA is working, 10 non-SEWA
8 basic Income villages and 12 ‘control’ villages
Cash Transfer villages: 4 SEWA and 4 non-SEWA (in order to test effect of Voice organisation)
Women in SEWA villages, accounts opened in SEWA co-operative; for all others accounts opened in nationalised banks.
Two tribal villages were also added as a parallel study, at the suggestion of MP government. Both are SEWA villages. Basic Income transferred in one village.
Amount Transferred
Pilot 1 in 8 Villages
Phase 1: June 2011 to May 2012: 12 months – Rs. 200 per adult and Rs. 100 per child
Phase 2: 5 months July 2012 to November 2012 – Rs. 300 and Rs.150
Pilot 2: One tribal village
January to December 2012 -- Rs 300 adult and 150 child
Profile of Beneficiaries
General Villages Tribal Village
No. of Households 986 127
No. of direct Recipients
5285 756
Total amount transferred
16.3 million rupees(xxx Euro)
2 million rupees(xxx Euro)
No. of months 17 months 12 months
Annual average amount transferred per HH
Rs. 16531(xxx Euro)
Rs. 15315(xxx Euro)
This presentation will concentrate only on findings of the Tribal
Study
Village Basic Income Village Control Village
Households 127 97
Population 756 817
Distance from district head quarters
70 km 60 km
Average Land per Household 2-4 bighas 2-4 bighas
School Up to 8th in the village Up to 8th in the village
Nearest health centre PHC - Karondia (25 kms)Sub-Centre – Badijam (6 kms)
Community Health CentreManpur (12 kms)
Tribal Villages in the Experiment
Tribal Village Economy and Cash
• substantial part of economic transactions are barter and non-cash in nature
• Workers often get paid in grain.
• Local grocery shops accept wheat or corn in place of cash
• Some occasions where cash is a big necessity are weddings, ritual ceremonies, medical emergencies, food emergencies, and lately the payment of school fees, etc.
• Extreme scarcity of cash; when households borrow cash, it is at interest rates ranging from 2 % to 10% per month.
• Often big debts are repaid through labour which is when it becomes bonded labour; employment in brick-kilns
Barter Transactions
Ice-cream Seller in the village
Agriculture – the main occupation
Combined with wage labour
Also livestock -rearing
The Research Study
• Baseline, Midline and Endline• Modified Random Control Trial Methodology
• 100 Case-studies (tracking families and village communities over 18 months)
Main Findings of the Study
Work and Employment: shift from Wage Labour to Own Farming
Reduction in Small Borrowings
Livestock : Increased substantially
Bought medicines more regularly
Food and Nutrition: Eating better
House Repairs and new houses constructed
Significant Effects of Unconditional Basic Income on Households
Wage Labour vs Own Farming
Baseline Control Endline Control Baseline Transfer Endline Transfer0
10
20
30
40
50
60
70
80
42.6
35.7
39.4
62.4
48.650.7
72.7
27.2
FarmerWage Labourer
Baseline Non- BI Endline BIEndline Non- BI Baseline BI
Shift in proportion of time spent on own farm vs as wage labourer
Livestock Increased Substantially
Control Transfer0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
466
424
302
527
351
628
Baselinemidlineendline
BI VillageNon- BI village
Increase in the total number of small livestock (fowl & goats)Source: Tribal 3 surveys Jan and June 2012, and Jan 2013
Increase in Food Sufficiency
Food Sufficiency in Tribal Village
BASELINE IES FES
1.7 0 2.7
50.8
78.281.8
45
18.6 13.6
2.5 3.2 1.8
More than sufficient About sufficient Insufficient Don't know
Source: Tribal Survey
Jan 2012 June 2012 Jan 2013
Increase in Food Intake
Rice
Whea
tSu
gar
Pulses &
relate
d
Milk &
milk
products
Vegeta
bles
Eggs
Alcohol, b
haang
Edible
oil
Fish an
d mea
tFru
it
Tea/c
offee
Total
incre
ase %
0
10
20
30
40
50
60
Control Increase %Transfer Increase %Cash TransferNon- Cash Transfer
Incr
ease
in p
erce
nt
Food Item
Source: Tribal End line Jan 2013
Reduction in Debt
Control Transfer0
10
20
30
40
50
60
70
80
6.4%
17.3%
71.1%
49.5%
Reduced debtIncreased debt
Source: Tribal Interim Evaluation Survey 2012
Reduced Dependence on Money-lenders
0
10
20
30
40
50
60
70
80
90
Control %Transfer%
Non- Cash Transfer
Cash Transferperc
enta
ge
Main source of financial support during crisis
baseline FES0
5
10
15
20
25
30
9
3
7
25
Non-cash transfer Cash transfer
Savings in % of HH
Source: Tribal Survey 2012-13
Regularity of Medicines Improved
More Private treatment More Government treatment Taking medicines more regularly No changes or DK0
10
20
30
40
50
60
70
80
Control %Transfer %Non- Cash Transfer
Cash Transfer
perc
enta
ge
Housing
Improved Repaired House Constructed new House0
5
10
15
20
25
30
35
40
45
Control %Transfer %
Non- Cash Transfer
Cash Transfer
Source: Tribal FES January 2013
Draupadibai’s New House: Pooling of money within families
-Draupadibai has 4 girls and 1 boy. Each month she received Rs.1350 which included her husband’s money too. Her husband works in a brick-kiln as a bonded labourer.-Three months after Basic income transfers began, the family decided to build a new house on their farm near the pond. Before that they were living in a hut far away from the village in the forest. -On the whole they spent about 15,000 rupees. They had saved 3000 rupees from the Basic Income money and started the work. Three of her husband’s relatives (masons) stayed with them for 2 weeks and helped them construct the new house. -After the masons did the basic structure and the roof, she and her husband did all other work. After that my husband went away to work in a brick kiln. -She did the entire plastering outside on her own slowly.
Village Level Changes
Fishermen’s cooperative
Transportation: Tata Magic comes to the village everyday
Two New Shops
Collective decision taken by the entire village to contribute 100 rupees from each family for marriage ceremonies in the village
Collective decision not to use pond water for irrigation in order to save it for the cattle
A new Fishermen’s Co-operative started in the village
A newly renovated house
Fish is easily available in the village
Tata Magic that goes to Mhow began to come everyday
One of the two new shops
Basic Income can be a powerful tool to minimise poverty
It can be a means of providing economic citizenship to the marginalised: unpaid, underpaid and invisible labour
Unconditional Basic Income is not just a welfare story or a poverty-alleviation story
But it is a Growth Story too
Thank you