Sunday, September 13, 2020

Basic Income: A Transformative Policy for India by Sarath Davala ,Renana Jhabvala, Somya Kapoor Mehta and Guy Standing

 

 

In recent times, the issue of ‘ basic income’ has acquired a political hue with various political parties adopting different avatars of this long discussed policy measure .This politicization of policy has ,as always, led to a considerable muddying of the waters of reasoned debate with ideological debris.

In this context the book by Davala et al is a refreshingly clear and extremely educative work of scholarship based on hard data from field research.

The authors begin by carefully defining their terms and the task at hand .Their objective is to assess the impact on clearly specified parameters, of a modest basic income disbursed monthly in cash without conditions, to all individuals in selected villages.

In Indore district of Madhya Pradesh eight villages all roughly similar in size and socio- economic structure, roughly equidistant from an urban centre and in close proximity to a primary school were selected at random for a trial as were twelve villages to serve as ‘control’ villages for purposes of comparison. Similarly, one tribal village was selected for trial and one control village for comparison. The NGO SEWA was active in all the villages and was part of the project which was funded by UNICEF. For a year and a half  every individual ,adult and child, in the trial villages got a certain sum of money  unconditionally.(Rs 200 per adult and Rs 100 per child between June2011 and May 2012 and Rs 300 per adult and Rs 150 per child between June 2012 and November 2012).No income was disbursed in the control villages . A base line survey was conducted before commencement of the pilot, an interim survey half way thru and a final evaluation survey after the pilot ended. The impact assessment of Basic Income was based on the huge amount of data these surveys generated.

It is important to emphasize that in addition to the pathbreaking results of the project, the book serves to educate in numerous other ways.

The authors analyze the functioning of two important policy measures adopted in India for poverty alleviation-the Public Distribution System for free/concessional distribution of essential commodities , primarily foodgrain , and the public works program to offer work to those wanting it in the rural areas. The PDS is expensive to run, plagued by leakages and corruption and often does not guarantee adequate availability of the products it purports to supply. Public works, even if adequately funded, do not help those unable to perform hard unskilled labour-the most vulnerable amongst the poor- and often do not create useful assets .They do not contribute to skill creation either.

The authors also emphasize the problems in any kind of conditionality or targeting in social welfare schemes. The problems of cost of implementation, inaccuracy due to exclusion and inclusion errors and corruption in field operations are rampant. By comparison, unconditional cash transfers appear to offer a better option as regards both efficiency and equity.

Having examined the pros and cons of various approaches to poverty alleviation the authors proceed to assess the impact of basic income on various symptoms that poverty exhibits in the villages studied, as compared to the control villages. Here too, before we reach the impact assessment, those of us not familiar with the realities of rural poverty in India, stand to learn some very disturbing stuff. Rural indebtedness, despite the plethora of financial institutions created over the years, and resulting from it ‘tied labour’, is a reality ten years into the 21st century. An indebted labourer may , on the strength of a loan, remain a naukar of a big landowner for long periods of time-often a lifetime!

The authors examine the impact of basic income on personal welfare, income and productivity and importantly, on freedom-the emancipatory effect of such income.

The principal welfare parameters are indebtedness, living conditions (toilets/energy use/water sources) nutrition and health. To pick up just indebtedness, Basic Income made a significant difference very quickly with debt showing a decline in both tribal and non- tribal villages. Households became more resilient in the face of external shocks- often the basic cause of indebtedness. The cynical view , that ‘private bads’ like alcohol consumption would increase were categorically disproved by the results and shown to be based on prejudice, not ground realities. Every welfare parameter showed improvement with Basic Income and the authors contend that the ‘emancipatory value’ of Basic Income was far more than just it’s monetary value.

Productivity and thereby income also showed improvement with Basic Income which permitted small investments that enhanced local income earning abilities and even impacted migration . Since women got the same income as men there was significant positive impact on women’s voice and a sense of identity and citizenship. A movement towards gender equity was thus an important consequence of Basic Income.

There is no claim that a small , universal , unconditional cash transfer is a magic wand to eliminate poverty. It is however emphasized that it can be an important tool especially if we face up to the fact that there are serious limitations to the tools currently in use-PDS, MGNREGA and very importantly the huge subsidies currently in vogue that are acknowledged to be largely regressive.

The one argument that I personally found overwhelming was that a small cash transfer can serve as a “minor correction for brute ill luck”. Endemic, visible poverty has perhaps desensitized us to a great extent and the absence of want has made us so complacent and we forget -as the authors remind us- that the basis of wealth is more often inheritance than personal effort and ability. Equality is perhaps impossible in the human condition and equality of opportunity is a dream that can be aspired to ( ‘getting to Denmark’, as Francis Fukayama put it) but how can we deny a small recompense for the visible and  implacable brutalities of fate.

The book is long, simply written and the regressions are confined to the appendix. It is not a light read but a rewarding one.

Happy reading.

2 comments: