By Dhanisha Raj
Remember my last post on Jharkhand’s bold move to introduce a “Semi-UBI”? If not, here’s the refresher: the state – in India – rolled out a universal benefit for women aged 18-50, proving that big ideas can come from unexpected places. Think of it as a universal basic income, but only for half the population and only for 32 years of their lives. Innovative? Definitely. Perfect? Not quite.
So, where do we go from here? What is the takeaway for other Indian states looking to introduce similar benefits? How do we move past these “semi” solutions and build something truly transformative? In this blog, I argue that it’s time to think beyond fragmented schemes towards building a multi-tiered, lifecycle-based social security system. While universal old age pensions are often the first entitlement for countries starting down this road – and India most definitely needs to strengthen its old age pension system – the focus on women of reproductive age offers a compelling opportunity to consider whether introducing a Universal Child Benefit (UCB) would be better than a flat benefit provided only to women. Not only would a UCB support families and address critical development gaps among children but, let’s face it, it’s also good politics.
Let’s begin by closely examining the current gaps in the design of Jharkhand’s Maaiya Samman Yojana (MSY). By focusing solely on women aged 18-50, large groups of the population are left out: children, older persons, and, yes, men, who also face economic hardships, in particular those experiencing disabilities, sickness or unemployment (and underemployment). Further, while the intent to empower women and reduce their care burden is commendable, the programme does not deliver equitable support.
As illustrated in Figure 1, with an increase in the size of the family, the effective per capita benefit received under MSY shrinks, leaving larger families with far less support. For instance, a woman with one child to support receives, between herself and her child, INR1,250 (US$14.50) each per month, a meaningful sum. However, a mother with three children gets the same despite having significantly higher costs. In per capita terms, she and her children receive just INR625 (US$7.20) each per month, a steep decline in support. It’s like trying to share a single umbrella in a storm: it might keep one person dry, but with multiple people huddled under it, no one is truly protected.
Figure 1: Effective level of transfer across different families
Source: Author’s elaboration
The age limit of 50 years also leaves many women in the lurch: older women may still be caring for children born later in life, but without the safety net they previously relied on, while many grandmothers may have care responsibilities for their grandchildren. And, of course, older women with children are at greater risk of falling into poverty as their capacity to earn diminishes.
The solution then isn’t just about plugging the gaps in Jharkhand’s MSY. I believe it is about reimagining Jharkhand’s approach to inclusive social security in a way that drives real change for children. With almost half of all households in Jharkhand belonging to the lowest wealth quintile nationally, families urgently need support to invest in their children’s health, nutrition, and education.¹ As I mentioned in my last blog, Jharkhand is facing real challenges in addressing child nutrition, education, and healthcare: for example, 39 per cent of children under 5 are underweight, while 67 per cent are anaemic.² In terms of schooling, Jharkhand recorded a dropout rate of 16.6 per cent in 2020-21, much higher than the national average.³
In the context of these challenges, a Universal Child Benefit (UCB) would be a game-changer. If Jharkhand were to change its flat benefit for women into a UCB, it would be able to address the greater vulnerabilities of families with more children. A UCB naturally adapts to the vulnerability of households. Let me explain.
Using the budget allocated to MSY, Jharkhand could introduce a child benefit for all children aged 0-17. Every child would receive INR1,050 (US$12) per month, roughly 5 per cent of India’s GDP per capita – an amount in line with the median transfer value for UCBs globally – without adding a single rupee to the State government’s spending. The difference? Instead of uneven support, this benefit would reach every child, equitably, empowering families to make meaningful investments in their children’s futures.
Figure 2 illustrates how this would translate into real support for different households. By providing a higher transfer value for families with more children, the effective level of transfer remains the same. That is, every family receives INR1,050 (US$12) per child per month but, in contrast to MSY, the most vulnerable families – with more children – receive much more. So, a family with 4 children would receive INR4,200 (US$49), reflecting its greater requirements, while a family with one child receives INR1,050 (US$12).
Figure 2: Monthly transfer value of UCB across different families
Source: Author’s elaboration. Graphic designed by Mays Abdeen.
Further, what if Jharkhand were to be really innovative and ensure that support continues for children as they pass into adulthood by continuing to provide benefits up to the age of 22? This simple yet powerful tweak to the UCB design would align closely with MSY’s goal of women’s empowerment. Yes, 18-22 year olds are no longer children but they are entering a critical life stage when social norms often push young women towards early marriage and childbirth instead of higher education or employment.
This option too could be designed with the same budget that Jharkhand has allocated to MSY, providing both a UCB and the universal benefit for young women, although the compromise is that the UCB value would have to fall slightly. For example, women between 18-22 years could receive a monthly transfer value of INR1,250 (US$14.40), while children could receive INR850 (US$9.80).⁴ This would not only ensure that Jharkhand realises the benefits of the UCB but also provides much-needed financial support to young women at this critical stage, enabling them to pursue further studies, delay marriage, and take control of their futures, all of which align perfectly with MSY’s intent.
There is a large and well-documented evidence base that showcases the impacts of child benefits. For instance, UCBs improve the standard of living for children and their families: in the Cook Islands and Mongolia, their UCBs have resulted in a reduction in the child poverty rate of 16 per cent and 11.5 per cent respectively.⁵ Families are increasingly able to invest in the health and well-being of their children, including by purchasing nutritious foods: in Nepal, for example, the child benefit has reduced stunting, underweight, and wasting by 9, 16, and 5 percentage points respectively for children under five years.⁶ Better nutrition can further contribute to improved cognitive development and academic performance, ultimately strengthening human capital within the country: for instance, the earlier that children enrol on South Africa’s Child Support Grant, the higher their test scores in mathematics and reading once they are at school.⁷
In fact, in a UNICEF study undertaken by Development Pathways, we showed that a UCB in India of just US$6.80 per month would reduce the national child poverty rate by 55 per cent and increase consumption among children by 45 per cent.
And for those worried about the supposed “perverse incentive” of child benefits encouraging larger families? Don’t be. There is little evidence to suggest that the introduction of child benefits increases fertility rates.⁸
While a UCB would be a major step forward, it’s only one piece of the puzzle. In reality, in the absence of other good quality, universal lifecycle schemes, such as old age and disability benefits, much of the financial support from a UCB – or from MSY – would be used by many families to help their elderly parents or those disabled family members who cannot work, thereby diluting the impact of the UCB. That’s why India needs to think bigger and establish a social security system that effectively addresses all the risks faced by individuals across their lifecycle. The potential impacts are significant: this paper authored by Kidd et al. (2023) shows that implementing universal child, old age, and disability benefits in India could reduce national poverty by as much as 70 per cent⁹ and reduce inequality by 14.4 per cent. Although a national rollout of the “Semi-UBI” is quite a strong incentive for me to move back to India, I’d rather India become more ambitious and invest in building a more inclusive social security system that leaves no one behind. The rewards—for families, for women, and for society—would be immense. So, what are we waiting for? I’m rooting for you, India. Let’s make it happen.
[1] IIPS and ICF (2021)
[2] IIPS and ICF (2021)
[3] Press Trust of India (2022)
[4] Alternatively, if women aged 18-22 years were to receive the same transfer value as MSY currently provides (INR2,500 or US$29 per month), then within the same overall budget, the UCB would offer a monthly transfer value of INR 700 (US$8.10) per child.
[5] Gorman et al. (2023); Nasan-Ulzii & Orton (2019). Since this time, in Mongolia the transfer value of the UCB has increased by 400 per cent so the impacts would be much greater.
[6] Renzaho et al. (2019)
[7] DSD, SASSA & UNICEF (2012). Note: The Child Support Grant is not a universal child benefit, it is affluence-tested.
[8] Doepke (2015), Bidzha et al. (2023), Magda et al (2019), Ahmed et al. (2007); Makiwane (2010); Baird et al. (2012).
[9] Assuming a pre-transfer national poverty rate equivalent to 60 per cent of the median consumption.
References
Ahmed, A. U., Adato, M., Kudat, A., Gilligan, D. and Colasan, R. K. (2007). Impact Evaluation of the Conditional Cash Transfer Program in Turkey: Final Report. International Food Policy Research Institute, Washington, DC.
Baird, S. McIntosh, C., Özler, B. Chirwa, E. and Garfein, R. (2012). The Impact of Cash Transfers on the Educational Attainment, Sexual Behavior, and HIV Status of Adolescent Girls in Malawi. Abdul Latif Jameel Poverty Action Lab. [link].
Bidzha, M. L., Johnson, L. F., Dorrington, R. E., Ngepah, N., and Greyling, T. (2023). The impact of child mortality on fertility in South Africa: Do child support grants and antiretroviral treatment matter?. Plos one, 18(4), e0284032.
Doepke, M. (2015). Gary Becker on the quantity and quality of children. Journal of Demographic Economics, 81(1), 59-66.
DSD, SASSA and UNICEF. (2012). The South African Child Support Grant Impact Assessment: Evidence from a survey of children, adolescents and their households. UNICEF South Africa, Pretoria.
Gorman, H., Mansoor, N., Kidd, S. and Attenborough, J. (2023). Social Protection in the Cook Islands: A Case Study. Partnerships for Social Protection.
International Institute for Population Sciences (IIPS) and ICF. (2021). National Family Health Survey (NFHS-5), India, 2019-21: Jharkhand. IIPS, Mumbai.
Kidd, S., Athias, D., and Tran, A. (2021). Universal Child Benefits: transforming the lives of children across South Asia. UNICEF Working Paper. [link].
Kidd, S., Mansoor, N., and Barca, A. (2023). An affordable and feasible pathway to universal social security using the principle of universality. Development Pathways, Act Church of Sweden and Action Against Hunger France. [link].
Magda, I., Brzeziński, M., Chłoń-Domińczak, A., Kotowska, I. E., Myk, M., Najsztub, M. and Tyrowicz, J. (2019). Family 500+: Program evaluation and proposed changes. Forum Obywatelskiego Rozwoju. [link]
Makiwane, M. (2010). The Child Support Grant and teenage childbearing in South Africa. Development Southern Africa 27(2): 193-204.
Nasan-Ulzii, E. and Orton, I. (2019). Universal Child Benefit Case Studies: The Experience of Mongolia. UNICEF and ODI. https://www.unicef.org/media/70471/file/MNG-case-study-2020.pdf
Niti Aayog. (2023). India National Multidimensional Poverty Index: A Progress Review 2023. Government of India, New Delhi.
Press Trust of India. (2022). Dropout rate at secondary level higher than national average in over dozen states: Official data. Indian Express. Retrieved from https://indianexpress.com/article/education/over-a-dozen-states-have-dropout-rate-at-secondary-level-higher-than-national-average-8173362/
Renzaho, A. Chen, W., Rijal, S., Dahal, P., Chikazaza, I.R., Dhakal, T., and Chitekwe, S. (2019). The impact of unconditional child cash grant on child malnutrition and its immediate and underlying causes in five districts of the Karnali Zone, Nepal – A trend analysis. Arch Public Health; 77:24. doi: 10.1186/s13690-019-0352-2. PMID: 31161038; PMCID: PMC6540561.