monopoly.This removes
any incentive or pressure to ensure the food’s quality is high or that it is
delivered on time and in adequate amounts.

is evidence that
public works result in poor output, as in ‘washed-away-roads’ and flimsy bridges.
The cost of monitoring is also high, which is one reason why schemes are rarely
evaluated. And while the choice of assets is supposed to be decided
collectively by the village in the gram sabha, this rarely happens. So, the
labour tends to be ‘make-work’ activities without economic justification,
undertaken just to spend budgets and give people something to do.Although
anyone can request labour, the scheme discriminates against labour-constrained households,
i.e. those without members available to take such jobs. The poorest households
often have people who are ill, aged or disabled. Drawing one person away may
leave others more vulnerable. And the labour can be particularly onerous for
women, who are under time

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pressure owing
to household and other work, and who are expected to do energy-draining

labour. This may
mean the calories used in the labour exceed the calorific value of food that

purchased as a result of it.Rationing also occurs because of discretion of

A second route
to tackling poverty and economic insecurity is provision of labour for the

designated poor.
In India, this is done primarily through the Mahatma Gandhi National Rural

Guarantee Scheme (MGNREGS, formerly NREGS) and public works.However, MGNREGA
has faced criticism around the quality and sustainability of assets

created under
it. There are many arguments against the labour line. It offends the

Test Principle,
as it involves controls imposed on those in need. There

officials in
responding to labour demands. In an evaluation in Bihar, Dutta et al (2014)
found that, controlling for other household and village characteristics, richer
households obtained more days of labour if they participated. Connections to
the Mukhiya or Sarpanch also mattered. This resulted in unmet demand in that not
everyone who wanted labour obtained it, or they obtained fewer days than they
wanted. Yet another argument against the labour line is that it emphasizes
unskilled labour. Workers are not allowed to use machines that would raise
productivity. Instead, they must use heavy pickaxes and shovels. Although the
MGNREG Act mandates that the program also provide for, as far as possible,
training and upgrading of skills, this has not been implemented. As it is
restricted to unskilled labour – like digging – it weakens the incentives to
learn skills. India’s demographic transition means that millions are being added
to the workforce with low skills, and as constituted MGNREGS would have to
continue to provide labour to an ‘army of unskilled workers’. And as it has not
generated skills, it has not helped the non-farm part of the rural economy.













According to
Economic Survey 2016-17 “Universal Basic Income is a radical and compelling
paradigm shift in thinking about both social justice and a productive economy”It
is premised on the idea that a just society needs to guarantee to each individual
a minimum income which they can count on, and which provides thenecessary material
foundation for a life with access to basic goods and a life of dignity.There
are five elements for such an universal basic programme



Regular Monthly

Through Bank account

Individual transfer

Presence of a union




Madhya Pradesh
Unconditional Cash Transfer Pilot Project 
is an innovative pilot testing the potential that such transfers hold
for addressing vulnerabilities faced by low income Indians performed by SEWA in
partnership with UNICEF. The project was innovative compared to many other cash
transferprogrammes in that it provided a universal, unconditional and
individual monthly grant to every adult and child in the selected villages.
Furthermore, the project was designed as a randomised controlled trial and
included comprehensive data collection before, during and after the implementation
period. In total, about 6,000 men, women and children in nine villages in Madhya
Pradesh received the transfer each month

for a year and a
half. A total of 15,000 individuals were covered by the research and 100
in-depth case studies were carried out with recipients. The project took the
form of two pilots. The first included eight villages, with 12 similar villages
included as control villages. The second pilot, which started slightly later
than the first, included one tribal village, with another tribal village as
control. The research design included both villages where

SEWA was active
and villages where they were not present, thereby enabling researchers to
discern the effect of SEWA’s work, both in combination with the basic income
and without.



Basic Design of
the Pilot followed these rules



i.  The transfer should be provided in cash, or in a form that could be
converted speedily

into cash, such as a bank transfer. The money should not be paid in a

lump sum, for
use over a longer period. It should be a regular payment, presumably

paid monthly and
not from time to time on an ad hoc basis or in longer intervals, such

as yearly.


ii.  The transfer should be universal within a village. In other words, all those usually

resident in the
“pilot community” should be provided with the basic income, and it

should not be
denied to anybody on moralistic grounds. For a pilot, a decision has to

be made on
whether a de facto or a de jure definition of residents should be used. The

de facto rule
would be to provide the basic income only to those residing in the

community at the
time of the launch of the pilot; a de jure rule would be to include

those who
normally lived in the community but who were temporarily absent at the

time of the
launch. It is recommended that only those absent and expected to return

within a month
should be included, and that – regrettably – no person coming to

reside in the
pilot community after the launch of the pilot should be included.


iii.  From (ii), it follows that there should be no targeting. The cash transfer should

be given only to
“the poor”, however that group was defined. In most low-income

most people have fluctuating income, being one day above any poverty

line, on another
day below it. Targeting on the poor creates well-known poverty traps

– if a person or
family raises their income a small amount they may well lose morein lost
benefit than gained by the increased earnings. And it should not be forgotten

that one
rationale for a basic income is that it acts to strengthen social solidarity.

there is a
desire to make sure the basic income is progressive – reducing inequality –

then the income
could be taxed back from richer groups, although this is not an aspect

of a pilot.


iv.  It also follows that there should be no selectivity. Giving to one
‘deserving’ group

rather than
another undermines social solidarity and ignores the likelihood of pressure

on some of the
groups selected for special treatment to share with others, if not give

away their cash
to somebody else.



v.  The basic income should be unconditional. In other words, it
should not be granted

only to
individuals who have committed to doing some pre-specified behaviour.

is popular, but is intrusive, paternalistic and contrary to the idea of

rights. There
should be no behavioural priors.


vi.  The basic income should be paid individually. It should be paid to
each man and each

woman equally,
and not be given to ‘the family’ or ‘the household’. The notions of

family and
household are endogenous, in that their structure and size may be affected

by the policy
itself and by outside events. But most importantly, the idea is to provide

basic income
security as a right. As far as children are concerned, and those with

disabilities or frailty of some sort, the designers of the scheme can allow for

a surrogate to
receive on their behalf.




vii.  The basic income should be a regular payment over a sustained period.

believe that
there is no difference between paying someone a lump sum or paying theperson an
equivalent amount over a longer period. There are good reasons fordisagreeing
with this, notably what is called the “weakness-of-will” factor, i.e., that if
a person receives a large sum, he or she may take a risk or spend it on one big
item.Furthermore, most basic requirements such as food require regular
payments. For a pilot, the income payment should be paid monthly over a
reasonable period.


viii.  The cash transfer should be sufficient to be meaningful for the
recipient, but should

not substitute
for the earned income. As shall be seen later in this chapter, the amount

of transfer was
calculated at 25-30% of a poor family’s income.




ix.  No other policy change should be introduced
at the time of the introduction of the

basic income, to
ensure that a fair assessment of its effects is feasible. This is

hard to achieve in a social policy experiment that necessarily lasts for a



In many aspects
result of these two surveys are quiet impressive


the benefit levels


The project set the
benefit levels with the aim of providing “enough to make a difference to

standards, but not enough to improve them considerably.” This was decided to be
about 20-30% of the income of lower-income families.With an estimated maximum
monthly income for vulnerable households of a little less than US$100 at the
time, the benefit level was initially set at the equivalent of US$4.40 for each
adult and US$2.20 per child per month between June 2011 and May 2012. After
May, the value was raised by 50% to adjust for inflation and provide a more
generous benefit. It is important to remember that, since these

are individual
grants, at the household level the transfer level is more meaningful and
comparable to the higher benefit levels found in other cash transfers around
the world.


on living conditions


There was a
range of impacts on living conditions.Many people used some of the money to
improve their housing, adding more space, making improvements to walls and
improving and repairing roofs. There was also an improvement in latrines, although
not as much as could have been hoped for, probably because increasing latrine
usage is as much about changing mindsets as it is about increasing incomes. There
was a dramatic improvement in assets,

especially in
the tribal village, the poorest of thetarget villages. For example, the
percentage of  households which had at
least one bed went up from 35.5% to 83%. Mobile phone ownership increased from
9% to 61% and the ownership of scooters or motorbikes rose from 3% to 30%.
These are assets that can make a vital difference to, for example, job opportunities
or access to market information.


on food security and nutrition


There was a
significant improvement in the self- perceived ability of beneficiaries to
cover food needs: before the project, 45% of beneficiaries claimed that they
had insufficient income to provide themselves with sufficient food, but this
fell to only 19% by the project end. The most dramatic change in food habits
was in the tribal village. The consumption of pulses and lentils went up by
1,000 percent (from 0.3 to 3.8 kilos per family per month), vegetables by 888%
(from 0.6 to 5.5 kilos per family per month), while the consumption of eggs and
meat also increased. After six months of receiving the cash transfer, the
proportion of households

sufficient income to satisfy food needs rose from 52% to 78%. In the control
village there was a slight drop. Probably the most eye catching result was the effect
on nutrition. Malnutrition is a scourge in India’s poor villages, resulting not
just from a lack of nutritious food, but from a range of factors, particularly
poor sanitation. Even though the cash

mainly addressed the
former challenge, the effect was very positive. By the end of the project