Transcriber: Cherimoya Shreya Balaji Reviewer: David DeRuwe
So what now, TEDx Eicher School?
Are you guys ready for a change?
And just pay attention to the screen.
This is what I propose to everybody
who is in this room and is getting a salary -
that from tomorrow onwards,
your salary comes in some contribution to the provident fund.
There's some vouchers that you will get for food.
You'll get some petrol money and money to send your kids to school,
irrespective of whether you have a car or you have kids,
compulsory deduction into medical insurance,
and at the end of it,
you will not have any money in your hand to spend on things that you want.
And I also want to tell you
that this particular salary slip has been designed by the best experts in India,
and they are your well-wishers.
Would you like to accept this change?
How would you feel?
Does it feel like childhood?
But this is precisely how we are treating
300 million ultra-poor people in India.
It's people like you and me who decide how the money
which is for their welfare is going to be spent.
There are a plethora
of NGOs, government agencies, political parties, aid agencies
who basically allocate all these resources for the poor on their behalf.
They decide whether the poor need a toilet or they need a school.
Whether the poor should go and do vaccination
or something like this.
Have you also wondered, when it comes to giving things -
Why is that people are always handing out an old piece of clothing?
Or they are giving something which is, they don't need, it's their trash?
Because in our country,
when it comes to working with poor and, you know, helping them,
our benchmarks are really, really low.
We believe that something is better than nothing,
and no wonder, so many years after independence,
we are not able to lift extreme poor people out of poverty.
I work in the social sector and I thought that organized aid,
an organized way of doing development work,
is more effective,
but that is really not the case.
On any development project which do you see
whether it's giving cows and goats,
or it's a cow and a goat kind of a project.
Behind every one such cow or goat, there are consultancies -
project overheads worth four cows.
And sometimes you have to stop and ask this question:
Is the value that we are adding into the project more than four cows?
Maybe yes, maybe no.
When it comes to working with the poor in the world,
there are basically two big groups:
One group thinks that the poor are poor because they're uneducated.
They make really, really poor decisions,
they cannot be trusted.
So they need us to tell them what they need,
and then we give it to them.
And not only that, we can trust them with a cow,
we can trust them with a training program.
What we cannot trust them with?
Money.
On the other hand,
there are some people who believe that poor people are just like you and me.
They're probably unfortunate,
they are intelligent,
they really know what they need.
So instead of giving them a cow, if we were to give them money
and the choice to decide what they should do with this money?
So maybe they'll go and buy a cow.
Or maybe some of them
will go and start a small business and earn an income out of it.
Some of them might decide to put more food on their table,
or spend this money on education or something else.
So these are the two distinct groups.
They are the ones who are basically forming how the work
around poor and poverty alleviation for the ultra-poor
is going to kind of work out.
So now in India, in a state called Madhya Pradesh,
Seva and UNICEF actually did a pilot,
and what they did in this pilot was they identified families,
and they gave money to each household member,
and then they stopped, and they then measured what happened.
And to their surprise,
they found that the income generation activities in the village,
you know, went up.
The money was given to both men and women,
so women had more decision-making
when it comes to doing things in their household.
They also found that there was no increase in the consumption of alcohol
or gambling or using this money for tobacco.
Elsewhere in the world, like in Africa -
there's a pioneering charity in the US called GiveDirectly -
they've been running large cash transfers
or, you know, giving free money to the poor in Africa.
And they have found
that every thousand dollars that they give away,
there were substantial increases
in income, savings, the well-being of the family,
year on year.
Closer home in Sri Lanka,
when money was given to small entrepreneurs as a grant,
the returns on that grant,
after five years,
were close to 200%.
So not only this seemed to kind of work, this is also sustainable.
You know, for a moment,
I want you to think as to what does it feel to be really poor.
Now, imagine that you're doing something really, really important.
Yeah, maybe you have an exam, or you have a presentation to make,
or something like that.
But your mind is constantly somewhere else -
you are not able to focus.
You are really worried about where your next meal is going to come?
What are you going to do today? Will you get some wages today or not?
These are the things that you're worried about -
you really cannot focus on the future.
You cannot attend the training program,
you cannot attend the capacity-building program,
or do something else.
It's almost like a computer, which is a fairly good computer,
but you have too many programs that this computer is running.
So the screen freezes.
This is not a bad computer.
So you cannot tinker with the software if you now want this computer to work.
Maybe it is time to add some memory,
and hopefully, the computer will start working again.
In the context of the poor, money is that memory,
so if we were able to give them money, maybe that will increase their bandwidth.
Now they're not worried about here and now.
They can start worrying about future,
how should they come out of poverty,
how they should really, really, improve their lives.
So I have spent about fifteen years in the social sector,
and I have really asked this proverbial question to myself,
"Am I worth more than four cows?
Is the value that I add into the whole system,
is it more than four cows?"
And it seems like, at least in this case,
(Hindi) Wisdom is not bigger than cows.
It seems like four cows,
are better than one of me actually doing something in the field.
So I believe that giving money
for free to the poor - it's a very, very good idea.
Economists call it with a very, very fancy name.
It's called an "unconditional cash transfer."
I believe that poor people are very, very enterprising,
they're trustworthy, they precisely know what they need.
They don't need me
to tell them what they need and then give it to them.
If we were to give unconditional money to the poor
over a period of two to three years,
300 million Indians,
then they will find out innovative ways to come out of poverty.
So this is what I am trying
to experiment through this initiative
called "Cashrelief,"
which is about giving unconditional money,
free money, no strings attached,
to the poor people.
So what we are going to do
is we are going to give 96,000 rupees to every household in a village -
this is equivalent to their two years of income -
over seven installments.
We will not tell them how to use this money,
We will probably step back, and then see what happens.
And maybe, you know, we are in for a surprise
because we believe that poverty
is really not a lack of character or ability.
It is lack of cash, so it's high time that we fix it,
we give money to the poor unconditionally.
Thank you everyone.
(Applause)