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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. Location of Madhya Pradesh where the Basic Income experiment was conducted.

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what is sewa
What is SEWA?

SEWA is a trade union of women workers in the informal sector

why is sewa interested in unconditional basic income
Why is SEWA interested in Unconditional Basic Income?

CLOGGED PIPES and Poor delivery of Welfare

why is sewa interested in unconditional basic income1
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
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.
tribal village economy and cash
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
Barter Transactions

Ice-cream Seller in the village

the research study
The Research Study
  • Baseline, Midline and Endline
  • Modified Random Control Trial Methodology
  • 100 Case-studies (tracking families and village communities over 18 months)
significant effects of unconditional basic income on households
Significant Effects of Unconditional Basic Income on Households
  • 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
wage labour vs own farming
Wage Labour vs Own Farming

Baseline BI

Endline BI

Baseline Non- BI

Endline Non- BI

Shift in proportion of time spent on own farm vs as wage labourer

livestock increased s ubstantially
Livestock Increased Substantially

Non- BI village

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 i ntake
Increase in Food Intake

Increase in percent

Non- Cash Transfer

Cash Transfer

Food Item

Source: Tribal End line Jan 2013

reduction in debt
Reduction in Debt

Source: Tribal Interim Evaluation Survey 2012

reduced dependence on money lenders
Reduced Dependence on Money-lenders

percentage

Non- Cash Transfer

Cash Transfer

Main source of financial support during crisis

regularity of medicines improved
Regularity of Medicines Improved

Non- Cash Transfer

percentage

Cash Transfer

housing
Housing

Non- Cash Transfer

Cash Transfer

Source: Tribal FES January 2013

slide32

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
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
slide40
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

Unconditional Basic Income is not just a welfare story or a poverty-alleviation story

But it is a Growth Story too