By Sifar Jirgale and Mihit Mundada
Table of contents
- Definitions and acronyms
- Abstract
- Literature review
- LBY and economic interventions for women
- Alternatives and analogues
- Testimonials regarding the LBY
- Conclusion
- All references
Section 1 - Definitions and acronyms
1) मख्ु यमंत्री माझी लाडकी बहीण योजना (Dear Sisters Scheme; abbreviated to LBY) - a policy enacted by the Government of Maharashtra (a state in India) to empower women across the state
2) Universal Basic Income/Basic Income (abbreviated to UBI/BI) - is a socio-economic policy proposal that involves providing all citizens of a specific population with a regular, unconditional cash payment
3) Monthly per Capita Expenditure (abbreviated to MPCE) - the amount of money spent per month
4) Direct Benefit Transfer (abbreviated to DBT) - this scheme or program aims to establish a Giro system to transfer subsidies directly to the people through their linked bank accounts
5) Mahatma Gandhi National Rural Employment Guarantee Scheme (abbreviated to MGNREGS) - a scheme that provides rural households with a given amount of work per annum at a fixed wage
6) Gram Panchayats (abbreviated to GPs) - the term used for a small village’s administrative body
7) Constrained women - women who are less likely to work, less empowered, and their husbands are more likely to subscribe to norms against female work
8) Unconstrained women - women who are likely to work, more empowered, and their husbands are more likely to subscribe to norms for female work
9) Customer Service Point (abbreviated to CSP) - a retail agent that provides banking services to customers at locations other than a bank branch or ATM
10) Actual norms - average personal beliefs about what people should do (Prentice, 2007) 11) Perceived norms - individual perceptions of community members’ beliefs about women and work
12) Female Labour Force Participation (abbreviated to FLFP) - level of female engagement with the labour force
13) Unconditional Cash Transfer (abbreviated to UCT) - a program that provides money to people without any conditions or requirements
14) Conditional Cash Transfer (abbreviated to CCT) - a welfare program that gives money to households that meet specific requirements
15) Self Employed Women’s Association (abbreviated to SEWA) - SEWA organises around the goal of full employment in which a woman secures work, income, food, and social security like health care, child care, insurance, pension and shelter
16) Randomised Control Trial (abbreviated to RCT) - a scientific experiment that compares the effects of different treatments by randomly assigning participants to groups
17) Scheduled Castes (abbreviated to SC) - a group of people in India who are considered to be among the most disadvantaged socio-economically
18) Scheduled Tribes (abbreviated to ST) - a group of people in India that are recognised in the Constitution of India as being among the most disadvantaged socio-economic groups in the country
Section 2 - Abstract
On June 28, 2024, the Government of Maharashtra launched the LBY. This policy aims to alleviate impoverished women's lives across Maharashtra by giving them 1,500/- per month in their personal bank account. Women whose families earn less than 2,50,000/- annually can apply to be the beneficiaries of this policy.
In this paper, we aim to assess the likely impacts of the LBY on women and men alike in Maharashtra by analysing two studies done in Madhya Pradesh, another state in India. One study covers the impact of giving women more control over their wages, and the other analyses the impact of UBI on various villages in Madhya Pradesh.
We acknowledge the people of Maharashtra's concerns about the LBY. Based on findings from the aforementioned studies, we provide suggestions and recommendations to the Government of Maharashtra on how to best carry out the LBY to maximise efficacy.
Section 3 - Literature Review
Field et al., ON HER OWN ACCOUNT: HOW STRENGTHENING WOMEN'S FINANCIAL CONTROL AFFECTS LABOR SUPPLY AND GENDER NORMS, 2019: In this paper, Field et al. analysed how giving women more control over their MGNREGS affected labour supply, gender norms and women empowerment indexes. We looked at this paper as one of the primary goals of the LBY is to provide women more control over financial resources, even though the exact research conducted by Field et al. is different in the way that it provides women more control over their wages as opposed to a CCT akin to the LBY.
Field et al. analysed the effect on several metrics, including but not limited to financial inclusion, labour market engagement, women empowerment, actual norms and perceived norms after providing women with a personal bank account, direct deposits of their MGNREGS wages and financial training. A randomised sample of 197 GPs across Madhya Pradesh was taken for this study, which had the form of an RCT. Field et al. also separately analysed the impact on constrained and unconstrained women.
The critical results used in this paper from Field et al.’s work were the effects of increased financial control and autonomy on labour supply, women empowerment and societal norms. We used their findings to analyse the likely impacts of the LBY on women in Maharashtra. Many constrained and unconstrained women are currently beneficiaries of the LBY. Field et al.’s findings allow us to draw reasonable conclusions about the likely impacts on these women (in both the short and long run) and make reasonable recommendations to the Government of Maharashtra on how to increase the efficacy of the LBY.
A Little More, How Much It Is…, 2014: Why consider UBI? We felt that UBIs and the LBY are quite similar in many ways, except that UBIs are just that: universal, whereas the LBY targets a specific demographic, in this case, women. Hence, we decided to also look into the efficacy of UBI and report on a study conducted on the same.
The study analysed for this section was an RCT conducted in Madhya Pradesh, a state in Central India, by SEWA Bharat, a trade union that promotes the rights of low-income, independently employed female workers, and UNICEF.
The hypothesis for this study was that people, when left economically independent, generally choose in the best interests of their family and their children, contrary to popular belief, in which it is often theorised that if people are given a basic income, especially in the lower strata of society, they will not be able to make economically sound decisions.
This report was also significant to our understanding of the LBY as it dealt with rural women, particularly women from various communities, some of them underprivileged. It served as an excellent comparison point to draw inferences about ideal additions to the LBY and challenges the scheme might face, all the while maintaining the quintessential Indian context required for policy-making in the country, if not the subcontinent.
Section 4 - LBY and economic interventions for women
Section 4.1 - Eligibility Criteria for the LBY
To become a beneficiary of the LBY, a woman must be the following:
- Aged 21 to 65
- Resident of Maharashtra
- Married, Widowed, Divorced, Abandoned/Destitute OR one Unmarried Woman in the family
Section 4.2 - Reasons for starting the LBY
Women in the Indian state of Maharashtra face several socio-cultural problems. Several data points (Directorate of Economics and Statistics, Government of Maharashtra, 2022) can be cited to prove this. Women aged 40-44 were 18.7 on average when they got married, while men the same age were 25.4 on average, making the median age gap 6.7 years. Only 13.38% of households in rural Maharashtra and 13.54% in urban Maharashtra were headed by women in 2019. The workforce participation rate for rural women was 34.1% from 2020-21, while the same rate for urban women was just 18.5%.
However, apart from significant socio-cultural issues within marriages and families, women also face problems such as desertation in Maharashtra. A 2010 study (Kulkarni & Bhat, 2010) comparing the marital status of women in Daund (a rural area) and Pune (an urban area) found that roughly 2.4% of women in both areas were deserted by their husbands. Desertation was found to be most prevalent in Scheduled Castes (8.18% in Daund and 7.20% in Pune) and Muslims (9.16% in Daund and 5.82% in Pune), highlighting the impact of caste and religion on desertation. The study showed that 52% of deserted women in Daund and 43.17% of deserted women in Pune were illiterate with no means to earn for themselves. To help such deserted, widowed and separated women along with women in marriages where they are abused and exploited, the government of Maharashtra launched the LBY on June 28, 2024.
According to the Government of Maharashtra, the LBY aims to:
- Promote employment generation by providing adequate facilities to women and girls in the state
- Rehabilitate them financially and socially
- Make women and girls in the state independent
- Empower women and girls in the state
- Improve the health and nutrition of the women and children dependent on them
Section 4.3 - Details of the LBY
To become a beneficiary of the scheme, a woman needs to provide the state government with the following:
- Aadhar Card
- Domicile Certificate/15-year-old Ration Card/15-year-old Voter ID/Birth Certificate/School Leaving Certificate
- In the case where a woman is born outside India, her husband’s Domicile Certificate/15-year-old Ration Card/15-year-old Voter ID/Birth Certificate/School Leaving Certificate
- To prove to the state government that a woman’s family income is less than 2,50,000/- annually:
- Yellow/Orange Ration Card OR
- In the case where a woman has a White/No Ration Card, an Income Certificate ● If a woman has been married recently AND her new name (after marriage) is not on her Ration Card, her husband’s Ration Card can be considered valid if she provides a Marriage Certificate
- Bank Account Details of the account linked to the Aadhar Card
- Authorisation Letter and Photo
Section 4.4 - Impact of the LBY
Currently, 10,669,139 women are receiving money from the LBY. According to a small survey (More & Chatre, 2024), the ages of the beneficiaries were as follows:
For 5 out of the 30 women surveyed, accessing the funds was “easy” or “very easy” as they were adept at using social media and the internet. However, for the remaining 25 women, applying to receive the funds was challenging. For 14 of those women, their application was rejected by the Government of Maharashtra due to a lack of required documents. The researchers found that the government asked for a stamp paper during the application process. Due to the high demand for stamp paper for various government schemes, many women had to visit the tehsil office (government administrative office) near their village. These are often quite far from the village centre, and making the journey to these offices is difficult for aged and destitute women.
Moreover, five of the women over the age of 50 said they needed more information to apply. They needed to be made aware of the documents required to apply because they could not use the internet to access government data. Five more women said they found the process of submitting an application “lengthy.”
On the other hand, all women unanimously reported that the LBY helped them become more financially independent. For the unemployed women, 1,500/- monthly made a huge difference. All women reported that they appreciated not having to rely on their husbands or other family members anymore for household expenses.
The 1,500/- per month greatly benefits the poorest rural women in India. The bottom 5% of the rural population in India, ranked by MPCE, spends 1,373/- per month. Such families receiving 1,500/- per month can cover their monthly expenditure and have excess money remaining. Thus, the LBY can help such families enhance their standard of living.
Of the women surveyed between the ages of 21 and 30, the responses on whether the LBY helps pursue higher education were quite divided. Four said it does help, and four said it does not, as higher education (often pursued in a different, bigger city) cannot be covered by the scheme's funds, and two said it is too soon to assess.
Section 4.5 - Assessing the short and long-run impact of wage DBT on women
A research paper released in September 2019 (Field et al.) details the methodology used to investigate how women’s financial control affects labour supply and gender norms. For this study, married couples with at least one member working under the MGNREGS were chosen.
The researchers identified 197 GPs and randomly assigned them into three groups: 64 GPs in the control group, 68 GPs in the ‘bank account’ group (wherein women were only offered a way to open a bank account for themself free or charge) and the remaining 67 GPs in the ‘bank account and direct wage transfer’ group (wherein women were offered a way to open a bank account for themself free of charge and their MGNREGS wages transferred to aforementioned bank account).
It is important to note that half the GPs in the bank account and the bank account and direct wage transfer also received accounts training on depositing and withdrawing money and receiving government benefits. Hence, the study effectively had four treatment arms: - Accounts ONLY
- Accounts and direct deposit
- Accounts and training
- Accounts, training and direct deposit
The results of this study were as follows:
Section 4.5.1 - Women’s control of MGNREGS wages
The women who were provided with a bank account, training, and direct deposits represented the group with the highest proportion of women getting MGNREGS wages in their own bank account at all: around 47%. The second highest proportion was that of the women who were provided with an account and direct deposits ONLY: around 31%.
Moreover, the women who were provided an account, training, and direct deposits also cumulatively received the most money in the form of MGNREGS wages during the study: about 4,100/-. The second highest amount earned was that of the women provided an account and direct deposits ONLY: around 1,900/-.
When the effects of the treatments are studied by constructing a regression framework, significant direct effects are observed. The coefficient of value payments in the project account for women receiving direct deposits AND/OR training was 2175.894, compared to 968.955 for women receiving ONLY an account. Of the 2175.894, 1592.441 constituted women who received direct deposits AND training.
Thus, the study found enough evidence that their treatments led to differences in women’s financial control, with direct deposits and training leading to the best outcome.
Section 4.5.2 - Women’s financial inclusion
The study showed that the provision of direct deposits and training led to a 0.131 standard deviation increase in the Bank Account Use Index in the short run and a 0.130 standard deviation increase in the long run. This increase was most prominent in constrained women: a 0.265 standard deviation increase. The increase for unconstrained women was 0.102 in the short run and 0.047 in the long run, thus making only the short-run results significant.
The study also found a 0.190 standard deviation increase in the Banking Autonomy Index. Again, the effect was most prominent in constrained women, for whom the increase was 0.266 standard deviations. The increase for unconstrained women was 0.092, which is not significant.
Lastly, the CSP Knowledge Index increased by 0.145 standard deviations. This increase was again only significant for constrained women (0.307 standard deviations), with the increase for unconstrained women being only 0.041 standard deviations.
Thus, the study found significant evidence that direct deposits and training increased account use, autonomy, and CSP knowledge for constrained women, allowing them to close the gap between themselves and unconstrained women.
Section 4.5.3 - Women’s Labour Market Engagement
The study showed that women’s labour market engagement after receiving direct deposits and training increased significantly in the short run (0.165 standard deviations) but not in the long run (0.045 standard deviations). This pattern can also be observed in unconstrained women, whose engagement increased by 0.150 standard deviations in the short run and decreased by 0.036 standard deviations in the long run. Constrained women saw significant increases in the short run (0.213 standard deviations) and the long run (0.193 standard deviations).
It can also be observed that constrained women’s long-run effects were mainly due to increased engagement with the private sector. The increase in the MGNREGS Supply Index was 0.069 standard deviations (insignificant), while the increase in the Private Supply Index was 0.279 (significant).
From this data, it is evident that direct deposits and training lead to an increase in the bargaining power of women within their families. Increased bargaining power allows women to explore private sector opportunities instead of just an increase in MGNREGS wages.
Moreover, increased bargaining power leading to decreased labour engagement in unconstrained women is consistent with the income effect. Thus, labour engagement in unconstrained women declines in the long run due to the income effect of employment.
Section 4.5.4 - Women’s empowerment
On several occasions, it has been found that economic and social empowerment reinforce each other (Kabeer, 1999). However, this loop does not hold for all forms of empowerment. In Bangladesh, for example, asset transfer and skills training led to a significant increase in female labour supply, financial inclusion, and the mental health index but had no substantial effect on decision-making (Bandiera et al., 2017).
To analyse the impact on women’s empowerment, the researchers of this study divided empowerment into three sections: purchase index, mobility in the past year, and self-reported decision-making.
Across the whole sample, the study showed no significant effect on women’s empowerment. Similarly, there was no significant effect on the empowerment of unconstrained women, whose index scores went down in several aspects in both the short and long run. Constrained women, on the other hand, showed a 0.144 standard deviation increase in the aggregate empowerment index. Significant increases include 0.239 standard deviations in the purchase index in the short run, 0.238 standard deviations in the long run and 0.115 standard deviations in ‘mobility in the past year’ in the long run.
The data allow us to conclude that direct deposits and training are only effective in empowering constrained women. Moreover, they allow us to infer that direct deposits and training do not increase women's decision-making agency.
Section 4.5.5 - Actual norms
The study also examined changes in norms held by both women and men.
A significant increase of 0.110 standard deviations in the actual norms index is observed among women. This suggests that enlisting themselves into the labour force led to liberalisation in women’s norms; working reoriented constrained women’s gender identity norms. However, again, this increase was driven by constrained women. Across all metrics, unconstrained women showed no significant liberalisation in actual norms. Constrained women, on the other hand, showed an increase of 0.215 standard deviations in the actual norms index.
Among men, no significant differences were seen in actual norms. There could be two primary reasons for this:
1) Husbands did not witness any substantial benefits because their wives were working 2) Personal behaviour change, as opposed to spousal change, is required for change in actual norms
Men report slightly more progressive attitudes towards women in certain aspects (while accounts only women were more likely than men to state that “women can work”, they were substantially less likely to prefer a daughter-in-law who works or a son-in-law who lets his wife work). Thus, providing direct deposits and training effectively closed the norms gap between men and women.
Section 4.5.6 - Perceived norms
Overall, the perceived norms index for women did not significantly change. The only significant increase is observed in constrained women: 0.116 standard deviations. Of this, the most significant contributor was an increase of 0.152 standard deviations in the acceptance of working women’s husbands among women.
The numbers for male reports paint a different picture. Even though the aggregate change in the perceived norms index is insignificant, liberalisation can be observed for both constrained (increased by 0.102 standard deviations) and unconstrained women (increased by 0.115 standard deviations).
These impacts are substantial, as data collected in the study shows that men tend to have more restrictive perceived norms: in accounts only, the perceived acceptance of husbands index is 0.33 standard deviation units lower among men, while the perceived acceptance of wives index is 0.14 standard deviation units lower. The data also shows that men are more conservative in their perceived norms compared to actual norms: in accounts only, men report that 57% of the community will negatively judge the husband of a working woman, yet only 33% of men report that women cannot work and in the vignettes, just 48% of men report that the non-working woman’s spouse is the better husband. Thus, direct deposits and training for women led to a reduction in norm misconception amongst men.
What are the plausible reasons for this? Three primary reasons emerge: 1) Husbands directly learn that they had overestimated the social sanctions of their wives working. 2) A man can observe a higher Female Labour Force Participation (FLFP) in his locality and discern that the social costs of women working are, in reality, relatively low. 3) Men may learn about women’s changing attitudes through other channels
Another point is that men’s perceived norms liberalised even for unconstrained women, whose labour supply had no significant long-term effect. Thus, social learning may have contributed to the persistent shift in men’s perceived norms.
Section 4.5.7 - Impacts by dividing GPs by FLFP
In this figure, an individual is considered "constrained" if they reside in a GP with an FLFP rate below the median rate (among the sample GPs) according to the 2011 Indian Census.
Only the labour supply and empowerment indexes had any effect on unconstrained women, and even this effect was only observed in the short run. Constrained women, on the other hand, experienced substantial impacts in the long run.
Section 4.5.8 - Results
Giving women more control over their MGNREGS wages through direct deposits and training them to use their bank accounts effectively had many positive effects on constrained women. Increased labour engagement, especially in the private sector, suggests a substantial increase in women’s bargaining power/autonomy in the household. Treated women had more progressive attitudes towards women in the labour force, while their husbands reported lower social costs of their wives working.
However, several impacts were insignificant for unconstrained women. Even those that showed a substantial increase fizzled out in the long run. Most alarmingly, in the long run, these women participated less in the labour force. This type of conformity to the neoclassical model of increased bargaining power leading to women being less likely to work raises questions about the efficacy or even need of such an intervention for unconstrained women.
The effects of this study can help us form policy suggestions for the LBY. Unconstrained women, who are likely already working and/or have a relatively high level of autonomy within the household, may work less after receiving 1,500/- straight in their bank account per month. It can also be inferred that the scheme will not have a significant effect on empowering unconstrained women.
Gathering funds to carry out the LBY is a big concern, especially amongst high-income taxpayers who will likely see their taxes increased to fund the scheme. It is projected that 46,000 crore rupees annually will be required to fund the LBY (Deshpande, 2024, The Hindu). As stated by Deputy Chief Minister Ajit Pawar, the Government of Maharashtra’s planned expenditure for the 2024-2025 financial year is 612,293 crore rupees (PRSIndia). The LBY will account for about 7.51% of the total expenditure, a large amount for a single scheme.
Chief Minister Eknath Shinde has stated that if his coalition wins in the upcoming Maharashtra Legislative Assembly Elections on 20 November 2024, he will increase the benefit obtained in the LBY from 1,500/- to 2,100/- (The Indian Express, 2024). This will increase the funds required for the LBY to 64,400 crore rupees annually, taking up 10.52% of total expenditure when annualised.
The Government of Maharashtra can target the most constrained women for the LBY to combat these enormous costs. Where are gender norms most rigid and employment opportunities the scarcest? Rural areas. Thus, to supply the intervention to only those it will benefit significantly, we suggest that the Government of Maharashtra target the most marginalised women in rural areas. Women from Scheduled Castes and Scheduled Tribes, who tend to suffer the most economic inequality, should be targeted, as it is these women who will see the most substantial benefits. Doing so will save much money and increase support for the scheme amongst the Maharashtrian populous and opposition parties.
However, the Government of Maharashtra must also consider the cost of surveys required for the targeted payments suggested above. India last had a national census in 2011. Hence, the government of Maharashtra will need to do an elaborate survey across the state and identify the constrained women from rural areas. If the costs of administering such surveys exceed the current cost of the LBY, it would be better for the government to proceed as it is doing now.
We implore the Government of Maharashtra to consider our suggestions and calculate the costs of surveys required to obtain data about constrained and unconstrained women. If the aggregate costs are found to be lesser than the current funds required for the LBY, the fiscal strain on Maharashtra can be significantly reduced.
Section 5 - Alternatives & Analogues
Section 5.1 - What is UBI?
UBI is a socio-economic policy proposal that provides all citizens of a specific population with a regular, unconditional cash payment. This payment is intended to ensure a minimum standard of living and is characterised by these five key features:
- Regular Payments: UBI consists of recurring cash payments made to individuals, typically monthly or bi-weekly, rather than as a one-time grant.
- Unconditional: The payments are made without conditions or requirements, such as work status or income level. This means that everyone receives the same amount regardless of their financial situation.
- Universal: UBI is designed to be available to all citizens or residents of society rather than being targeted at specific groups based on need or eligibility criteria. 4. Individual Payments: The payments are made directly to individuals rather than households, ensuring that each person can access their income.
- Minimum Income Guarantee: The goal of UBI is to provide a financial safety net that helps alleviate poverty and economic insecurity by ensuring that everyone has enough income to meet their basic needs, such as food, housing, and healthcare.
Over the years, there have been many attempts to bring UBI into the mainstream, from Thomas Paine, whose pamphlets inspired the American Revolution, to Martin Luther King, as a method of curbing the economic gaps faced by racial minorities in the United States. Most recently, Democratic presidential candidate Andrew Yang made universal basic income a key pillar of his 2020 campaign, which helped shine a national spotlight on the issue.
Let us analyse the advantages and disadvantages of UBI, particularly UCT. 18
Section 5.1.1 - Benefits of UCT (UCTs in UBI)
UCTs have recently received renewed attention as a tool for poverty alleviation in developing countries. This is because of two primary reasons:
1) Firstly, they allow their recipients to gain further economic agency and spend the money received as they see fit. This means that the money received is usually spent in the most efficient manner possible.
2) Secondly, they are an excellent means to replace other apparatus of the welfare state, particularly transfers in terms of kind, i.e. wheat, groceries, etc., as these also mandate various specific criteria, which lead to an increase in inefficiency. On the other hand, because these cash transfers are unconditional, their implementation is much faster and more efficient while replacing existing measures in a state’s welfare framework.
Section 5.1.2 - Disadvantages of UCT
Typical arguments for the disadvantages of UCTs are usually centred around the possibility that their implementation might,
1) Lead to an increase in the expenditure on temptation goods and,
2) Contribute to a decrease in the labour supply owing to an increase in the income of the household
Section 5.2 - SEWA-UNICEF study
The procedural considerations undertaken by the team (Arya et al., 2014) are stated below:
1) Every individual registered as a usual resident at the project's launch received income. The only requirement was that they open a bank account within three months of the launch.
2) Transfers for children under 18 went to the mother or, if there was no mother, a designated guardian. Individual transfers were made to assess the utilisation by different types of individuals within a household, including the elderly, women, and differently-abled persons.
3) Another feature was the regularity of payment: all individuals received the designated amount every month to assess spending patterns. The transfers were given to all residents of a village to avoid distortions due to meanstesting and to enable evaluation of the impact of basic income on households with different income levels. Thus, the project paid all individuals—rich, poor, elderly, women, children, differently abled, and those belonging to vulnerable caste groups—the same amount every month over a year in designated villages.
4) An important detail of the study was the amount of money that was paid to each individual. In order to combat the fact that the basic income might replace their usual economic pursuits, the amount paid to each person was only around 20-30% of what their actual income was. This only covered their bare necessities, thus necessitating some sort of further economic activity.
The table below details how exactly the money paid was distributed:
The importance of creating a distinction between SEWA and non–SEWA villages was to analyse the importance of financial intermediaries in executing such policy initiatives.
Opening individual bank accounts was done intensively, and within four months of the start of the general pilot, 95.6% of individuals had bank (or cooperative) accounts; for the remaining 4%, accounts were opened in the next three months. Due to the presence of SEWA, more women (365) than men (117) had accounts before the project in SEWA basic-income villages. The basic income went to 5547 accounts in the eight villages covered by the general pilot. The tribal pilot was unique because no accounts were opened, and the basic income was disbursed in cash.
The importance of financial intermediaries was then proven when the data regarding the share of accounts was analysed. It should be noted that banks were also approached with the idea of assisting people experiencing poverty in opening their accounts, wherein certain bank managers were enthusiastic to help with the idea and co-operated in opening and organising camps for the same. However, most managers needed to cooperate and assist in the initiative. The bulk of the work of this part of the experiment was carried out with the primary assistance of SEWA as a financial intermediary. Women in the four SEWA basic-income villages faced fewer problems opening accounts – nearly 70% said they faced no problem opening a cooperative account compared to 44% of women in non-SEWA basic-income villages (who said they faced no problem opening a bank account). Similarly, while 61% of households in non-SEWA basic-income villages said they faced considerable difficulty withdrawing their money, only 27% in SEWA basic-income villages faced difficulties.
The relatively more straightforward experience of dealing with a financial intermediary such as SEWA compared to banks is also reflected in the number of times individuals dealt with both institutions. In SEWA basic income villages, where women received the money in
cooperative accounts, nearly 86% said they could approach the institution or others (in this case, the cooperative) several times. In comparison, only 44% of women in non-SEWA villages said they went to their banks multiple times.
Section 5.2.1 - Key Findings
1) Sanitation
The basic living conditions in basic-income villages improved, starting with improved sanitation in villages covered by the general pilot. About 16% of the households in the basic-income villages covered by the general pilot said they had changed their toilets by the end of the project, compared to only 10% in the control villages (figure 2). Most households attributed the change in their toilet arrangements to receipt of the basic income: 14.3% fully and 46.9% partly so. Among the households with no toilet at the outset of the general pilot, more than 7% reported building a new toilet compared to 4% in the control villages. In comparison, no significant change in the availability of toilets was observed in the tribal basic-income village.
2) Drinking water
Some of the basic income was invested to get better access to drinking water, especially in tribal villages. There was evidence of improved access to drinking water in both general and tribal villages receiving the basic income, but the source of improvement varied.
Basic income households covered under the general pilot, for instance, were significantly more likely than their counterparts in control villages to use public taps/ hand pumps for drinking water and less likely to use their neighbours’ houses, private water sellers, or public wells or taps, suggesting better investment in public resources.
On the other hand, in the tribal villages receiving the basic income, there were significant improvements in private water sources, which were meant for household use and irrigation. In other words, tribal BI recipient households spent a part of their extra cash investing in better (private) water resources for drinking. One in five households made their tube wells, and another one in five invested with a neighbour instead of using a public hand pump.
3) Energy sources
Cooking and lighting energy sources also improved. Many households in the general pilot used their basic income payments to change or improve their energy or lighting sources. According to the FES, 24.3% of basic income households covered under the general pilot had changed their main source of energy for cooking or lighting in some way in the previous 12 months, compared to just 10.6% in the control villages, with the difference being statistically significant. The tribal village, too, reported changes: 16% of households in the recipient village reported using better cooking fuel, and 14.5% reported improving their lighting, compared with practically no change in the control village.
One in every four households receiving the basic income in the general pilot changed their sources of energy for cooking or lighting; in comparison, only 10% of households in the control villages made that shift, thus indicating a higher degree of energy investment directly caused by UBI-UCT.
4) Household Assets
The tribal villages, which were much poorer than the general villages, recorded significant increases in household asset ownership. Recipients spent some basic income buying household assets in the general pilot but little. Households were more likely to buy productive assets to earn more income than assets that would give them more comfort. However, in the tribal villages, families purchased all types of assets throughout the project, but families receiving basic incomes were more likely to purchase them.
5) Food Sufficiency
In both the general and the tribal pilot, those who received basic income reported a statistically significant increase in food sufficiency six months into the intervention. The results were striking in the tribal pilot, where the proportion of basic income recipient households reporting their income as sufficient to satisfy their expenditure on food increased from 52% at the start of the pilot to 78% after six months of receiving cash. In comparison, little changed in the control village: the numbers reporting their income to be sufficient to fulfil their food needs only declined (from 59% to 57%) over the same period. In general, a receipt of basic income was also associated with a rise in reported sufficiency, particularly for vulnerable households such as the SC and ST households.
6) Nutrition
A receipt of basic income had a statistically significant impact on children’s nutrition in both general and tribal villages, particularly on the nutrition levels of female children. Before the basic income transfers started, the proportion of normal weight-for-age children in the recipient villages under the general pilot (as suggested by z-scores constructed using Anganwadi records) was lower than in control villages (39% compared to 48%).
However, by the end of the intervention, a 20-percentage point improvement was observed in the former villages (from 39% to 58%). In comparison, the increase in control villages was a modest ten percentage points (from 48% to 58%). Further, while the nutritional status of boys
improved in both types of villages, there was a rise in the proportion of girls with normal weight-for-age in basic-income villages (a 25 percentage point improvement compared to a 12 percentage point improvement in control villages).
The difference was statistically significant. As Figure 4 indicates, the weight-for-age distribution, particularly for girls, shifted towards the right, towards normal in general villages receiving the basic income.
7) Healthcare
Basic incomes also afforded families more choice in the type of health service and the timing of seeking health care. Over the course of the pilots, the use of government hospitals as a first port of call when ill declined slightly in the general basic income recipient villages, and the use of private doctors and hospitals increased.
A similar trend was observed in the tribal BI village, while households increased their reliance on traditional home remedies in the control village. While the project does not claim that private services are better than public services, what is clear is that when given a choice, more people opt to pay for private services.
8) Debt
Basic income payments reduced households' burden of funding their health expenses through a vicious cycle of debt. By the end of the general pilot, borrowing for hospitalisation expenses was lower in basic-income villages (46%) compared to control villages (55%), and the difference was statistically significant.
Instead, more cash-recipient households said they had used their income/savings to pay for hospitalisation. What was even more encouraging was that SC and ST households in the general pilot tended to rely less on loans than their counterparts in control villages.
9) Productive work
One of the most important findings was the growth of productive work in both general and tribal villages, leading to a sustained increase in income. Nearly 21% of basic income recipient households in the general pilot reported an increase in income-earning work or production, compared with just 9% of the control households (Figure 5).
The transfers also seemed to be progressive. More SC households receiving the basic income reported an increase in economic activity (19.4%), whereas only 7.2% of SC households in control villages said they had experienced an increase. The difference was not statistically significant for other social groups.
10) Female Empowerment
a) Decision-making
Women’s empowerment was one of the more important outcomes of this experiment; most women receiving the basic income thought they could participate in decisions on spending their basic income. In other words, the basic income appeared to have made household decision-making more equitable.
In the general pilot, 54% of women in basic-income villages reported that household income was shared equally, compared to 39% of women in control villages.
This was also true for decision-making dynamics in the tribal pilot. Between the baseline and the end of the pilot one year later, in the basic income tribal village, there was a perceptible shift from a strong norm of the household head deciding on how income was spent to a weaker norm and a relative shift towards equal decision-making. The change within the basic income households compared to the control households was statistically significant.
b) Personal finances
Individual accounts and individual transfers strengthened women’s control over finances. When asked whether they preferred payments into their accounts or family accounts, fewer women in the basic income ‘general’ villages said they preferred a family account— 40% compared to 47% of men. More women were likely to prefer an individual account. The question of whether the money should be given to the household head or the individual yielded a similar pattern of responses, with over 42% of women preferring individual transfers compared to 34% of men.
c) Health
Women and girls also benefited disproportionately from the basic income in terms of nutrition, health and education outcomes. As discussed earlier, the z-score index on nutrition suggested that girls experienced a more significant drop in malnutrition than boys of the same age group in the general village pilot. There was also some evidence that girls gained parity in diets and, as a result, gained in relative terms. Into adulthood, there was evidence that women in general – and disabled women in particular – gained relatively more in terms of access to food and their dietary balance.
In the tribal BI village, impacts were seen on women’s healthcare: more tribal women in the BI village (Ghoda Khurd) accessed health facilities and took medicines regularly than in the control village. In the tribal baseline, when respondents were asked what form of medical treatment was first taken, 22% of women in Ghoda Khurd said they tried “home remedies”, whereas only 8% of men said that. However, by the end of the tribal pilot at the time of the FES, this had changed significantly, with less than 2% of women in Ghoda Khurd saying their first option was home remedy. They went to local medical practitioners or private or government hospitals like the men.
d) Education
Female students benefited more than boys, with secondary school enrollment increasing among girls in families receiving the transfer under the general pilot.
e) Labour & Employment
Women who received the basic income increased their labour and work relative to women who did not, particularly in the tribal village where women’s labour force participation increased by 16%, while it scarcely changed for men.
One reason for this was the shift to own account work, which was particularly significant in the tribal village where the share of women doing it rose from 40% to 60%, while in the control village, it shrank.
Another reason for the shift was that small-scale and marginal farmers in the tribal village could farm their land. The share of women in the tribal BI village, whose primary activity was farming, almost doubled, rising from 39% to 66%.
There was a 6% increase in BI recipient households owning assets such as sewing machines, whereas the number fell among the control group. Women in basic-income villages participated more in household decision-making. Similarly, assets such as livestock were also bought, which had implications for household income and women’s work.
Section 5.2.2 - Results
We can infer from the study that banks for rural women are usually difficult to deal with in a host of activities, ranging from withdrawing money from their accounts to obtaining credit. This often hinders their financial freedom as these banks have various bureaucratic hurdles that these women have to bypass in order to gain their allotted benefits from the scheme.
These findings highlight the general social disparity in even the allocation of funds to public resources between tribal and general villages, as the tribal villages invested in private water resources as soon as they received the cash/funds, as compared to the general villages where there was a reliance on public water sources.
The higher improvement in z-scores for girls in SEWA villages highlights the importance of voice organisations in facilitating and solving women's day-to-day problems. Hence, organisations like SEWA serve a double role as financial intermediaries and platforms for issues from marginalised communities.
This particular finding of the research provides evidence contrary to the belief that productive work will decrease should UBI be introduced. When UBI-UCT was introduced in these villages, productive work only increased by a significant number instead of decreasing.
Section 6 - Testimonials regarding the LBY
We spoke to two women who are eligible for the LBY. In order to respect their confidentiality, we will not reveal their names.
One of them applied for the LBY payment benefits and began receiving them promptly. She received payments on time each month, as promised. We learned from her that she primarily used the 1,500/- to buy stationary and gifts for her children. Previously, she mentioned that her usual income was caught up in household needs. However, now, she has some excess cash for what she wants. In other words, she felt increased financial autonomy and decision-making.
On the other hand, she acknowledged that 1,500/- is insufficient to account for significant household expenses such as food and rent. This comment makes sense, as the monthly rent for a one-bedroom apartment in Pune (where we are based) ranges between 12,000/- and 25,000/- (Adani Realty). Nevertheless, she appreciated even the tiny amount of money she received from the government.
The other woman said she applied for the LBY a month ago, yet her application remains pending. She needed clarification regarding the required documents and the application process. However, she was happy to mention that her daughter gets the LBY benefits on time.
Section 7 - Conclusion
The analysis of the two studies gives us some idea as to how the LBY will affect women across the state of Maharashtra. We implore the government to explore the idea of targeting constrained women only to ease the financial strain on the state. Moreover, we highlight the several benefits that a universal system of payments can have. Though this is not feasible for all citizens of the state, such a system can have several benefits for low-income GPs and tribal villages.
The testimonials we collected show us that even such a small amount of 1,500/- can increase women’s happiness and financial autonomy. Beneficiaries are delighted that they can now purchase a small toy for their children or a new dress without taking money out of their regular income.
The testimonials also tell us that confusion regarding the LBY persists despite current government efforts. This is a huge problem, especially because several women eligible for the LBY may be illiterate and may not have access to the internet. The Government of Maharashtra must conduct awareness campaigns in rural and tribal areas, in particular, to spread the LBY to those who need it the most.
Moreover, they show that the LBY application process is occasionally ineffective. We would urge the Government of Maharashtra to fix any software/administrative issues regarding pending applications as soon as possible so that a maximum number of women can become beneficiaries.
Several studies also show that interventions that target multiple issues faced by women (e.g. financial autonomy and educational inequality) are generally more effective (Chang et al., Abdul Latif Jameel Poverty Action Lab). If the government couples LBY campaigns with other interventions, such as employment opportunity awareness programmes or education/upskilling initiatives, the LBY will offer much more holistic benefits for Maharashtrian women.
We implore the Government of Maharashtra to explore the aforementioned suggestions to uplift millions of Maharashtrian women using the LBY and similar initiatives.
Section 8 - All references
References are chronologically ordered in terms of use in the paper.
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J-PAL Evidence Review. 2020. “Enhancing women’s agency: Cross-cutting lessons from experimental and quasi-experimental studies in low- and middle-income countries.” Cambridge, MA: Abdul Latif Jameel Poverty Action Lab.
