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INDIA: World Economic Forum recognizes Madhya Pradesh basic income pilot studies

The World Economic Forum (WEF) has bestowed its “Best Practices in Governance” award–conferred as part of a global competition seeking new approaches to inclusive and sustainable growth–to the India Network for Basic Income (INBI) for a case study of basic income in Madhya Pradesh, India.

The award was presented to Dr. Sarath Davala, an independent sociologist and the cofounder and coordinator of INBI. Davala was one of the designers and analysts of a pilot study of basic income in the Indian state of Madhya Pradesh, conducted by UNICEF and the Self Employed Women’s Association (SEWA) from June 2011 to November 2012.

During the 18 month trial, 6,000 individuals in nine villages (including one tribal village) received monthly unconditional cash transfers equivalent to about one quarter of the median income in the state. The transfers were delivered to all adults in each village in the pilots, with smaller amounts for each child, with similar villages used for controls. Relative to residents of control villages, individuals receiving the cash transfers were seen to be significantly more likely to receive adequate nutrition, receive regular medical treatment, invest in improved energy and sanitation, start new businesses, and send their children to school, among other improvements.

The study and its results are described at length in Basic Income: A Transformative Policy for India, coauthored by Davala, Renana Jhabvala (SEWA), Soumya Kapoor (World Bank), and BIEN cofounder Guy Standing.

Recently, the Indian government has consulted the Madhya Pradesh pilot while investigating the potential impact of a basic income–an idea that has gained political appeal in the country as a possible alternative to its current system of targeted in-kind benefits, which is widely acknowledged as inefficient and corrupt. Chief Economic Adviser Arvind Subramanian devoted an entire chapter to basic income in the 2017 Economic Survey, in which he cites evidence from Madhya Pradesh in rebutting the argument that unconditional cash transfers would lead to a reduction in the labor supply. Subramanian contends that, contrary to this common worry, “the study shows that people become more productive when they get a basic income.”

The case study prepared by Davala describes the original pilot study as well as subsequent dissemination of its results and the process of communication with the national government.

It was one of over 1200 entries to WEF’s global competition New Vision for Development, which solicited cases studies demonstrating approaches to sustainable and inclusive economic growth. About the award, Davala states:

The point is not whether one case-study gets an award or one person gets it. The main point is that the idea of Unconditional and Universal Basic Income is being recognised and endorsed by the mainstream global institutions as an idea that can potentially answer some of the most troubling questions of our times such as chronic poverty, future of employment, meaning of work, and so on. This is truly a big victory for the idea itself. 

In addition to honoring “Basic Income Pilot in Madhya Pradesh, India” with the award for the “Best Practice in the Governance” category, the WEF selected the case study would be one of twenty entries to be featured on WEF’s Inclusive Growth and Development Platform, an interactive online platform which will be launched on September 18.

 

Moreover, the WEF has also invited Davala to present at an Impact Summit to be held in New York, New York, on September 18 and 19. The summit will feature presentations by other winners of the New Vision for Development competition, and the Inclusive Growth and Development Platform will be launched as part of the event.

Based in Switzerland, WEF is a nonprofit organization that describes its mission as “committed to improving the state of the world”. In recent years, WEF has participated in the conversation surrounding basic income by publishing articles on the topic on its blog (see, for example, recent contributions from BIEN cofounder Guy Standing, World Bank economist Leora Klapper, and basic income advocate Scott Santens), and by hosting panels on the topic at its annual high-profile conference, Davos. WEF’s founder and chairperson Klaus Schwab has said that he himself considers basic income “basically plausible”.

Despite WEF’s apparent interest in the basic income conversation, and despite its award to INBI in its New Vision for Development competition, WEF has not itself endorsed basic income as a recommendation for socially inclusive growth. Its comprehensive paper “Inclusive Growth and Development Report 2017” mentions basic income only to emphasize that basic income alone is not an adequate substitute for “five crucial institutional underpinnings of a well-functioning labor market”: labor-market policies, equal access to quality education, gender parity, non-standard work benefits and protections, and effective school-to-work transition. The report does, however, allow that basic income may “form part of an appropriate policy response” or “serve as a useful complement” to strategies aimed at enhancing the five aforementioned areas.


Reviewed by André Coelho

Photo: Valleys of Madhya Pradesh, India CC BY 2.0 Rajarshi MITRA

Kate McFarland

About Kate McFarland

Kate McFarland has written 484 articles.

Kate has previously made a living as a professional student, with her most recent academic interests including philosophy of language and pragmatics, and is now a freelance writer, editor, and researcher. She received a grant from the Economic Security Project to work for Basic Income News in 2017.

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One comment

  • Naga Ratna

    So proud of you Dr. Sarath Davala. Basic Income is an idea which needs to be implemented immediately in countries like India. I hope all the extra cash generated by GST goes to something really useful like this.

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