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. It is a test to understand if this will change the trajectory of their lives for better. The money will just be given. The people will not be told 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. Therefore, each household will be given a sum of Rs 96000 in one go, for them to have a working captial which they would have managed to save only over a period of 3 years or so.
The total cost of the pilot is going to be Rs 38 lakhs. Out of this, 32.6 lakhs will be direct cost of cash transfer and the rest will be overheads to the pilot for fund raising, transfer charges to beneficiaries, operations, etc.
Selection of the target village and household
A village with high percentage of the ultra poor will be first selected. Once identified, everyone in the village will be enrolled for the program unless someone opts out. Everyone in the village are selected in order to avoid social friction due to selection and non-selection. Targeting is very difficult and the cost of identifying the poor is also higher. Additionally, the hope is that everyone being the beneficiaries will ignite the village to come together in interesting ways.
South Rajasthan is identified as place for launching the pilot. In the final selection of the pilot village, the villages with deep law and order issues, caste and community friction and alcohol/drug abuse will be excluded. These issues we feel can potentially hamstring our pilot.
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