Project of the Day: Panthbadodiya Basic Income

Panthbadodiya Basic Income

by Benjamin Fernandez

The village of Panthbadodiya lies 30km south of Indore, in Madhya Pradesh. Known as the “Heart of India”, this central state has the country’s highest levels of malnutrition and largest tribal population. The ethnic majority here are the Bhil: under the classification system inherited from the British administration they are an “aboriginal tribe”; under the Indian government’s policy of positive discrimination towards disadvantaged communities and castes a “scheduled tribe”.

A group of Bhil women were gathered on mats before their mud and straw homes, built some distance from the other village houses. Mamatabai Punjraj told me the government had given her a bigha (about a quarter of a hectare) of land to farm. But a few months later she fell from a tree while collecting firewood and broke her left leg and hand. “To pay the 25,000 rupees ($460) we owed the hospital, we took out a mortgage on the land, for 50,000 rupees. With the 25,000 we had left, we bought half a bigha of land to farm: we grow maize in the rainy season and beans in winter. But last year the rains did not come on time and we lost our crop. We don’t know how we are going to repay the 25,000 rupees we borrowed from the landowner.”

As in many villages, the landlord, who inherited his land and is of a high caste, is the only employer and lender. Punjraj has no job; her husband works as a day labourer in a city. Her eldest son, Vinod, is a naukar, working all hours for the landlord for never more than 15,000 rupees a year ($275); her second son, Laxman, is a gwala — a child who works for a landlord in return for a reduction of his parents’ debt; her daughter goes to school, thanks to government aid; her youngest son will be a gwala when he is old enough. This serfdom has contributed to the failure of the Indian government’s attempts to raise the great majority of the population out of poverty. More than 77% are thought to live on less than 20 rupees ($0.37) a day, despite India’s rapid economic growth (1).
A new pilot study at Panthbadodiya could significantly change living conditions for the poor, and India’s approach to fighting poverty. The village is taking part in the Madhya Pradesh Unconditional Cash Transfer Initiative, a project run by the Self Employed Women’s Association (Sewa; a trade union that has defended the rights of women with low incomes in India for 40 years), with subsidies from Unicef (United Nations Children’s Fund) India. The research director, Sarath Dewala, explained: “The experiment involves giving individuals a small sum of money, at regular intervals, as a supplement to all other forms of income, and observing what happens to their families if this sum is given unconditionally.”

Dewala’s team studied the effects of a minimum monthly income on 4,000 people in eight villages over 18 months. There were no conditions regarding wages, employment, caste, gender or age, and the recipients could use the money as they saw fit. Besides social security benefits, adults received 200 rupees ($3.65) a month, and mothers were given 100 rupees for each child. Four of the villages had had help from Sewa for some years, with the organisation of support groups, savings cooperatives (2), bank loans, training in financial management and support during visits to local officials. Twelve non-participant villages served as controls for comparative study. The initiative, modelled on an urban Sewa project in a district of Delhi, was India’s first applied research on unconditional income. The hypothesis was that direct financial payments would change behaviour and improve family living conditions, especially children’s nutrition and health.

Studies at the beginning, mid-point and end of the project confirmed that, in villages receiving payments, people spent more on eggs, meat and fish, and on healthcare. Children’s school marks improved in 68% of families, and the time they spent at school nearly tripled. Saving also tripled, and twice as many people were able to start a new business.
“With this money, we can buy more food,” said Mamatabai Punjraj. “I also spend some on medicine, and it means I don’t have to borrow. I have joined the women’s savings group. I’m going to save all the money I get and spend it on my son’s wedding.” Mamatabai’s brother-in-law Bahadua was a gwala until he was 13, earning 4,000 rupees a year, then he became a naukar on 13,000 rupees. He had to borrow his day-to-day living expenses from the landlord. Now, at 22, the unconditional income means he can refuse to work under such conditions.

The idea of giving money to the poor without asking for anything in return startled some. “They told us the men would use the money to get drunk, and the women to buy jewellery and saris,” said Dewala. “But it’s a middle-class prejudice that the poor don’t know how to use money sensibly. The study showed that a regular income allows people to act responsibly. They know their priorities. When something is rare, people measure its value. (Anyway, in tribal villages, people distil their own liquor.) The main advantage is regularity. It makes it possible to organise, save and borrow. The principle is that a small amount of money generates a great deal of energy in a village.” (

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