Distributing Wealth — One Village at a time

There is a common belief (myth?) that poor people are often stupid and ignorant. If money doesn’t make rich more intelligent (and that’s proven?), how does lack of money makes a poor person the opposite. We all know that poverty often means lack of money and yet, if you announce you’re giving money to poor people, anyone who is not getting that money loses their shit.

This post is about one such announcement. We, at Cash Relief, gave INR 96,000 to one woman in each household at a hamlet in Udaipur, Rajasthan. The hamlet has a total of 34 households, which means INR 32,64,000 was given. This is gift, not loan and it’s being given unconditionally. It’s their choice to use it as they wish.

Now, most people are not getting the ‘wish’ part. Strangers on the road, Bank officials, Facebook friends and real-life acquaintances have reacted with smirks and skeptic laughter. The facial expressions (or sometimes emojis) change as if I robbed their money and gave it to these 34 people.

There’s shock, wonder, of not being able to comprehend the simplicity of thought, and then come the suggestions — with that quote about catching a fish. Oh! The number of times I’ve heard and read it in last three months. There’s more advice though:

  1. Teach them a skill (and then? By the way, NGOs are doing it already)
  2. Find their need and spend on it. (We think the need is money. You find another one?)
  3. Divide the same amount of money in more people and define a purpose. (How does it help?)
  4. Pay their medical bills (We are lazy. Finding 34 sick people, measuring their sickness and if their need is to get healthier, is quite a task)
  5. Buy them an insurance policy. (Ummm…They can do that with 96k, right?)

When my parents want to buy me a present, however small or big, I ask them to give money instead. Whenever (and that’s always) I can’t think of a gift for a friend on his/her wedding, I give cash. Why then, do we give a hand-pump or a cycle to poor people in villages?

If today, the richest people in the country, say Ambanis, start giving a Kindle to each one of us, on a condition that we have to send them a picture on downloading first five e-books (using Jio internet of course), how many of us would want to exchange it for money!

Our reasons can be any of these:

  1. We may already have it.
  2. We may not want/need it.
  3. We may never use it.
  4. We think we’d do something better with an equivalent amount of money.

While Ambanis may want to declare to the world that all Indians now read digitally, we may not want to do that, because there are too many of us existing in too little space and that makes our needs different. Similarly, poor people don’t always need a toilet!

Now, let’s come to reasoning (often assumptions) I got from people who keep on recommending not giving money to poor people:

  1. They will spend it on alcohol (Who does that with INR 96,000 specially when he/she is earning about 5% of that per month?)
  2. They will make a house (What’s wrong with that?)
  3. They will waste it, you should give information instead (Define waste and information please)
  4. They won’t know how to utilize it (Your dad said the same about you and yet you think you’ve done well, right?)

All these assumptions start with a common default, that they don’t know. They don’t have the information, knowledge or just a mind. Within 15 days of receiving money, I saw them setting up a bore-well in farms, plastering and repairing their homes, replacing a wooden door with a metal one, leveling fields, buying cattle, stocking groceries for a small shop and preparing for a family wedding.

This was an experiment to see what people do when they get an equivalent of their income for two years, at once, without any strings attached. Here are two reasons why I think we should (you may too) replicate it in other regions as well:

  1. Direct cash transfer is one of the easier and quicker ways to distribute wealth.
  2. Great things happen when we trust other people-poor or rich, men or women, urban or rural.

Watch: What happens when you give INR 96,000 unconditionally to a poor family in India?