Our first step is to conduct a pilot project.
Our pilot aims to test if giving ultra poor some money with no strings attached can help them come out of extreme poverty. We want to test if this will change the trajectory of their lives for better.
We will just give the money. We will not tell them what to do with this money. There will be no conditions attached to receiving the money.
What is our hypothesis
People are unique and so are their needs. Cash allows poor to use it in ways they think is best. Some will invest in health and education. Others will take risks and start small businesses. We believe making unconditional cash transfers to ultra poor will help them come out of poverty. This is our hypothesis.
How much money will be given?
India’s latest rural poverty line is at Rs. 972 per month. So for a household of an average 4 people this comes to Rs 3888 per month . We plan to give a household Rs 96000 in installments over ten months.
|Month||Amount ( INR) for a household of 4|
Selection of the target village and household
We will select a village with high percentage of the ultra poor. Once we have identified the village we will enrol everyone in the village for the program unless someone opts out. We want to cover everyone in the village to avoid social friction due to selection and non-selection. Targeting is very difficult and the cost of identifying the poor is also higher (Means tests are expensive). Additionally we are hoping that giving everyone will ignite the village to come together in interesting ways.
Where will we do the pilot
We have identified Bihar, Rajasthan and Madhya Pradesh as possible places for launching the pilot.
In the final selection of the pilot village we will exclude villages with deep law and order issues, caste and community friction and alcohol/drug abuse. These issues we feel can potentially hamstring our pilot.
How much funding is involved?
The total cost of the pilot is going to be Rs 100 lakhs. Out of this, 90 lakhs will be direct cost of cash transfers for two years and approximately 10 lakhs will be overheads to the pilot for fund raising, transfer charges to beneficiaries, operations, etc.
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How will we know this is working?
We plan to engage a principal investigator associated with an institution with experience and interest in this field. We hope they will be interested to fund it themselves which will also add to the independence of the study. We plan to do a baseline, mid-term and final evaluation on the parameters of assets, consumption and feeling of control over one’s future. Our main motivation for this project is into reignite hope into people leading lives of quiet desperation in extreme poverty