User:Renukagarg/sandbox

In 2009, the Self Employed Women’s Associations (SEWA) began organizing pilot programs to test the effect of an unconditional cash transfer in Madhya Pradesh, one of India’s least developed states. SEWA is a trade union that was established in 1972 to promote the rights of self-employed, low income women throughout India. Its mission is to improve the standards of living for women in India and help women achieve full employment. The purpose of the Madhya Pradesh Unconditional Cash Transfers Project (MPUCTP) is to test the potential for cash transfers to address vulnerabilities that low income Indians face. The unconditional cash transfer is a form of a universal basic income, as it provides a set allowance to all civilians in a village every month without any restrictions on what the money can be used for.

The MPUCTP, backed by funding from UNICEF and implemented by SEWA, consisted of two pilot programs in 2011 and 2012, both in Madhya Pradesh, a rural area in which SEWA tried to alleviate poverty and inequality. In the first pilot, which lasted 18 m, 20 similar villages were chosen. In eight villages, everyone received grants and in the remaining 12, no one did. In half of all the villages, regardless of whether a village received a grant or not, there were SEWA representatives present to monitor the village. These test villages had similar variables of socio-economic levels, service access, geographical location, and similar infrastructure. In the second pilot, which lasted 12 months, two similar tribal villages were chosen. Everyone in one village received grants and no one in the other village received anything. Between both pilots, over 6,000 individuals received cash transfers. In both pilots, every man, woman, and child in the selected villages were given a moderate unconditional cash grant: 200 per adult per month and 100 per child per month for 12 months. After 12 months, their grants were raised to 300 and 150, respectively, per month for 6 months. A child’s grant was given to its mother or other designated guardian. These amounts accounted for 20 to 30 percent of a monthly income for a low income family.

To distribute money to families without bank accounts, SEWA used “door-step” banking. Some villagers were suspicious of SEWA giving “free money”, fearing later conditions. SEWA could not directly address these issues and were dependent upon time and understanding.

On May 30th and 31st of 2013, SEWA presented its preliminary findings from the studies at a conference on "Unconditional Cash Transfers: Findings from Two pilot studies" in Delhi. The findings show numerous improvements in health, productivity, and financial stability. In terms of impacts to health, the unconditional cash transfers were associated with better food security and lower rates of malnutrition in female children. Less food deficiency improved children nutrition and led to more balanced diets. Recipient villages had lower rates of illness, more consistent medical treatment, and more consistent medicine intake. Families receiving cash transfers had more livestock, which helped improve health and financial stability. Additionally, productivity rates increased, as children in recipient villages had higher rates of school attendance. Villages receiving cash transfers had higher expenditures on schooling and agricultural inputs, promoting better education and higher agricultural yields. Some concerns of the universal basic income are that it will discourage labor and encourage consumption of alcohol. However, cash recipients had higher rates of labor and work, especially in self- employed contexts. And, there was no evidence of higher alcohol consumption in recipient villages than control villages; in fact, in the recipient tribal village, alcohol consumption actually decreased. The effect on labor productivity was especially strong for women and tribal communities. Financial stability improved significantly in villages receiving cash transfers. Households with cash grants were three times more likely to open a new business or take on a new production activity than households that did not receive the cash transfer. These households also decreased their indebtedness and increased their savings, and some were even able to open bank accounts to remit the cash grants.

One important factor not addressed in the study was the impact of environmental hazards on the sustainability of the project and, thus, the larger universal income idea. Although the positive results of the pilot programs were overwhelming, the long-run impacts of such short term (12-18 months) projects cannot be measured. The results of the pilot program disprove many criticisms of the program, but further investigation and experimentation is necessary to test the feasibility of a universal basic income for India.