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Rural Bihar Prefer Healthcare, Infrastructure Over Cash Transfer: World Bank

A timely survey conducted in rural Bihar by a World Bank economist and two professors from the Georgetown University to gauge the response of poor people on the raging debate over a minimum income support scheme showed that the poor preferred better public healthcare and road services over direct cash transfers.

The survey conducted by Stuti Khemani, senior economist at the World Bank, and professors at the Georgetown University James Habyarimana and Irfan Nooruddin, of around 3,800 respondents over November-December last year showed only 13% chose cash if it came at the expense of spending to improve public health and nutrition, while the number grew to only 35% if the cash came at the expense of improving roads.

“These percentages are the same when we restrict the sample to respondents with little or no education, or to those who belong to historically disadvantaged caste groups. That is, the poor and less educated are overwhelmingly choosing public health over cash,” the authors wrote in a blog post published on Brookings website.

To place the trade-offs with cash in context, responses to two additional choices were presented to respondents: (1) public health versus job creation programmes targeted at the poor; and (2) public health versus roads. Public health was preferred by 73% when traded off against workfare programmes that provide jobs to the poor, and by 79% when traded off against roads. “Some of the poorest citizens of one of the most economically underdeveloped parts of India prioritise public health well above job creation programmes and roads, with cash coming last,” the authors wrote.

Data from the survey also suggests that there isn’t much political demand for minimum income programmes. When village-level politicians were asked which area of performance or service delivery would be most important for them to get elected or re-elected, only 4% mentioned the rural job guarantee scheme MGNREGS. The largest number of village politicians, 35%, mentioned “maintaining social harmony,” with the rest scattered across health (14%), education (14%), roads (15%), and water and sewage (15%).

“We think this descriptive data brings critical questions for the policy debate on minimum basic income. One set of questions is centered around trade-offs — what is the risk that other types of public goods and services on which the poor may rely would suffer as a direct consequence of a cash transfer scheme? Both because of the fiscal cost of the scheme as well as the limited implementation capacity of state governments in India,” according to the authors. – Livemint

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