BASIC INCOME
A Transformative Policy for India
Sarath Davala, Renana Jhabvala, Guy Standing and Soumya Kapoor Mehta
Bloomsbury; 234 pages; £11.99
Since the National Democratic Alliance has decided to keep the United Progressive Alliance's direct benefits transfer policy alive, a study of the various forms of delivering financial doles is essential for assessing the benefits and pitfalls of this mode of delivering subsidies. In this book, the four authors make a case for switching some spending on subsidies to schemes for providing unconditional basic income based on the results of two pilot studies that were conducted in Madhya Pradesh.
Both pilots, funded by Unicef, were conducted along with the Self-Employed Women's Organisation, or Sewa, the reasoning being that, other things being equal, basic income schemes would have a bigger impact in areas where this non-governmental organisation for women's empowerment operated. The bigger pilot involved paying a monthly basic income to every person in eight villages. Their experience was compared with what happened in 12 similar villages called "control villages". The smaller pilot involved paying basic income to everybody in one tribal village for 12 months, which was compared with a similar tribal village in which nobody was paid the basic income.
Before explaining the methodology, process and implementation of the basic-income pilots, the book first deals with the debate surrounding cash transfers in various forms. It outlines cash transfers as incentives, subsidies, bonuses and benefits that may be targeted, selective or conditional. While dealing with each one of them, the authors have made a case for unconditional cash transfers through basic income, which is defined as "a sum paid regularly, in money, to individuals without conditions, as a universal or rights-based payment, paid as an equal amount to all adults as citizens".
For the pilot project, the authors explain that the amount of basic income was set at a level that would be enough to make a difference to living standards but not to improve them considerably. "As such, it was set at about 30 per cent of the income of lower income families," they write. Accounting for inflation and other factors, each adult was paid Rs 200 and each child Rs 100 each month from June 2011 to May 2012. Later, the monthly amount was increased by 50 per cent to adjust for inflation: Rs 300 per adult and Rs 150 per child was paid up to November 2012.
After describing the methodology and structuring of the programme, eight chapters are devoted to evaluating the impact of basic income on various parameters - emancipation, living conditions, nutrition, health and medicine, education, work and productivity, women's status, and, finally, its impact on the elderly and the disabled.
The most striking finding, the study says, was that spending on girls' schooling was significantly boosted by the basic income. "One contributing factor was a practice monitored by the evaluation surveys, that of pooling money from the individual basic incomes. Teenage girls were the primary beneficiaries. Without the basic incomes, teenage boys were given priority in limited spending." The basic income allowed girls in that age group to catch up, and this was achieved in many cases by families pooling part of their basic incomes to pay for their education.
The study says the basic income had also given recipient families greater control over their decision-making, lessening the strain of having to decide between, say, optimum food choices or extra schooling for their children. Similarly, while analysing the impact on the elderly, it says old-age households with the basic income reported increased spending on doctors' fees. For instance, one Surajbai is quoted as saying: "I was helped by this (basic income) money immeasurably. I used it for my treatment and feel better … I am old but independent."
In the concluding chapter in which the transformative potential of basic income is discussed, the authors ask the new government to consider modest basic-income schemes "objectively and dispassionately". They argue that a universal basic income as an anchor for the 21st century social-protection system of India is desirable, whether it is phased in as an additional social protection policy or a substitute for other schemes.
The message is a powerful one, but the problem with the book is that no attempt has been made to package and edit all this useful information into a readable book. The upshot is that it ends up reading like a long and turgid research paper. If the attempt is to promote cash transfers in the form of basic income, then the book has successfully made the point. What it lacks, however, is making a connection with readers who may want to know more. In that sense, the book could have provided an important perspective to policymakers and those who directly deal in cash transfers, or what the government prefers to call "direct benefits transfer".
