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 FES1.7 0 2.7

50.878.2 81.8

4518.6 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

WheatSu

gar

Pulses &

relate

d

Milk & m

ilk pro

ducts

Vegeta

bles

Eggs

Alcohol, b

haang

Edible o

il

Fish an

d meat Fru

it

Tea/co

ffee

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