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State governments such as Kerala and Bihar have, in recent years, resorted to partial or complete prohibition to mitigate alcoholism, particularly among the poor. The success of such an approach is yet to be established, although the governments concerned claim success. Alcohol may not be freely available in these States, but those who want to drink always find ways to source their poison — mostly from bootleggers and from other States. Perhaps governments should try a new experiment to wean the poor from alcohol — transfer small amounts of cash to them as additional income with no conditions attached.
Many pilot studies conducted in India and elsewhere in the developing world on the impact of the basic income scheme or unconditional cash transfers have found that the poor spend such funds judiciously — mostly to improve their food intake and invest in assets, including income generating ones. In some, though not all instances, they may need a gentle nudge to spend wisely.
The most surprising finding was that the alcohol and tobacco habit declined not just as a proportion of total income but also in absolute terms among the recipients. Most of these projects were run by either Abdul Latif Jameel Poverty Action Lab (J-PAL) or Basic Income Earth Network (BIEN). Basic income pilots carried out in Madhya Pradesh by SEWA and Unicef too found that alcohol consumption declined among recipients of unconditional cash transfers. In the MP pilot, a few people stopped drinking altogether. Only some households reported an increased spending on alcohol. The conventional wisdom is that people waste money given without conditions. Yet these studies show otherwise. Perhaps this happens because additional income makes a person feel better psychologically and financially. That leads to improved consumption of food as well as higher productivity. Alcohol is often consumed as a stress-buster and with less stress, its consumption too should decline, though not among addicts.
Senior Deputy Editor
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