CONDITIONING CASH TRANFERS: BIHARS BICYCLE SCHEME

Abhinav Nayar
1

Yale University, Departments of Ethics, Politics & Economics, and South Asian Studies (United States of America) abhinav.nayar@yale.edu

Abstract
The Mukhyamantri Balika Cycle Yojana (Chief Ministers Bicycle Scheme for Girls) is a conditional cash transfer (CCT) and welfare scheme of the Bihar state government in India that awards Rs. 2000 (~$45) to every student enrolled in standard IX in a government high school to purchase a bicycle. This paper documents institutional processes and fund flows in the implementation of the scheme and briefly assesses its qualitative impact from field notes and personal interviews conducted in a sample of government high schools and madrassas. While media and quantitative studies purport the scheme to have been immensely successful in raising enrollment and curbing dropout rates, qualitative findings based on interviews with beneficiaries, their families, school and government officials also realize important psycho-social benefits. With regards to implementation, however, there appear consistent gaps in deployment. Funds are usually delayed and the entire allotment for disbursement seldom comes. This paper recognizes and appraises the distribution of bicycles as effective policy and efficient investment in education while also highlighting the procedural problems in deploying the scheme. Keywords: conditional cash transfers, qualitative impact assessments, education, high school enrolment rates.

INTRODUCTION

Membering a new generation of development programs, conditional cash transfers (CCTs) provide monetary assistance to impoverished families conditional upon investments in human capital such as sending children to school. Such an innovative scheme is the Mukhyamantri Balika Cycle Yojana, announced by Bihar Chief Minister Nitish Kumar in 2006 to address issues of poor enrollment among girls in high schools in Bihar and narrow the gender divide. The scheme awards a monetary benefit of Rs. 2000 (~$45) to purchase a bicycle, the only eligibility criterion being enrollment in class IX in a government high school. By avoiding distinctions based on caste, economic status, urban-rural differences or distance between beneficiaries residence and the local school, the scheme allows for a vast and marginalized audience to be targeted. Over the years, this target has been expanded by Mukhyamantri Balak Cycle Yojana, which was started in 2009 and extends the scheme to boys, and by including madrassas. The outlays of these schemes, given below, have aided over 3 million beneficiaries since inception. Table 1: Outlays for Mukhyamantri Cycle Yojanas by year1 (figures in Rs. lakh/hundred thousand): Scheme Mukhyamantri Balika Cycle Yojana Mukhyamantri Balak Cycle Yojana 2006-2007 3588.92 2007-2008 3260 2008-2009 5443 2009-2010 17437 2010-2011 9800 2011-2012 12900

NA

NA

NA

11293

12700

14700

Sources: Planned Expenditure Budget, Bihar Government. Economic Survey(s) of Bihar 2007-2011.

METHODOLOGY

The research for this paper was informed by fieldwork done in selected areas in Purnea district in Bihar, India. The author interviewed the following kinds of informants beneficiaries of the Mukhyamantri Cycle Yojana i.e. female and male students in government high schools and madrassas who had received funds for a bicycle, entitled students who had not received these funds, parents of both categories of students, principals, teachers, and clerical staff at government high schools and madrassas, and administrative staff in the Purnea District Education Officers office (DEO). The interview sample represented institutions that were boys government high schools, girls government high schools, co-educational government high schools, and co-educational madrassas, and were conducted on site. All fieldwork, including interviews and sample data collection, was completed in the span of one week in late June, 2011. The Processes and Fund Flows section of this paper is largely sourced in investigative interviews with administrative staff in schools and in the DEOs office. Such questions pertained to the procedure and implementation of this welfare scheme, whether staffers were aware of official guidelines and what systems they followed, experience in working with officials at other tiers of administration, and observed problems in deployment. All information regarding process timelines, receipt and disbursements of orders and funds was substantiated with official letters, circulars and other documents with dates such as relevant registers and spreadsheets presented on-site. In schools, this information was cross checked privately with students accounts or estimates regarding actual receipt of the funds or bicycles, process based checks such as collection of receipt-vouchers, and information given to them by school officials. The Qualitative Impact section of this paper is informed by observation and interviews with beneficiaries, students, their parents and teachers. For example, lines of qualitative inquiry were guided by questions directed at students enquired about how the bicycle was being used, by whom and how often, what activities beneficiaries have enjoyed since receipt of the bicycle, on peer groups and their relation to owning a bicycle, questions arising out of students responses in the course of such conversation. Responses and emotional reactions were noted. Parents and teachers were asked for their direct observations on the behavioral changes in their wards in aspects such as social skills and willingness, academic interest, and other qualitative traits. They were also asked leading questions on their interactions, allowances and expectations from their wards. An effort was made to evaluate the differences between allowances made to and qualitative changes articulated for beneficiaries and the entitled students who had not received funds for bicycles (which was viewed as a control group).

PROCESSES AND FUND FLOWS

The successful implementation of CCTs requires well-developed infrastructure to transfer money without leakages and ensure that accountable investment is made. In Bihar, the privation of infrastructure bases implementation of the scheme largely in the discretion of senior school staff and government officials such as those in the local District Education Officers (DEO) office. The scheme is effected through a simple thread of processes. Admissions in high schools of Bihar are undertaken in the month of April and often lead into part of May. The school principal and staff compile two spreadsheets (one for girls and another for boys) containing the students name, her/his guardians name, date of birth, admission number and the like of each of the students admitted to class nine. These lists (often compiled into a CD) form the schools demand and are sent to the appropriate DEOs office between mid-May and early June. The school maintains a handwritten copy in registers designated for the scheme. Upon receipt of the school demand from all high schools of the district, the DEOs office prepares the district demand and forwards it to the Directorate of Secondary Education in Patna usually in late June or by early July. The Directorate in Patna processes district demands and dispatches funds calculated at Rs. 2000 per beneficiary to the DEOs in the form of government treasury bills in August. Back in the DEOs office, officials withdraw allotted funds from the treasury and forward it to schools through cheques, drafts or direct bank transfers if possible. School officials report that scheme funds are usually received sometime between October and January. Schools are required to distribute these funds in cash to students in a public ceremony attended by students guardians and local public figures such as the MLA, Panchayat Mukhiya, or ward member. To ensure that this cash is used only for the purchase of a bicycle and the condition of the CCT is fulfilled, beneficiaries are required to submit the purchased bicycles invoice or bill with a VAT number to the school office, usually within 15 days of receiving funds. School officials digitize these invoices

and records of disbursement of funds, such as signatures of the beneficiaries taken during distribution and photographs of the ceremony, into a CD and send it to the DEO. The DEO forwards it to the Directorate in Patna for record keeping thereby completing the annual process cycle. . Fig. 1: Process Timeline
DEO forwards district demand to Directorate of Secondary Education, Patna Schools send receipts of cycles purchased to DEO

Admissions undertaken

DEO sends drafts to schools

April

May

June

July

August

September

October

November

School sends list of eligible students to DEO

DEO receives district allotment in treasury bills

Schools distribute cash students

to

DEO forwards proof of distribution to Directorate

Despite the simple disbursement chain, the scheme suffers from several problems of implementation. The first of these is bureaucratic delay. The scheme takes six months to nine months to transfer cash for bicycles to its beneficiaries. As the academic year lasts from April to March, the entitled class often receives funds towards the end of the school year. The costs of this delay, and misalignment of the schemes process calendar with the schools, are incurred by students in the form of low attendance and difficulties in conveyance for several months to a year, thereby seriously depreciating the benefits of the scheme. Moreover, school staff often (incorrectly) informs students that they must maintain, for example, 80% attendance to qualify for the scheme and receive funds for the cycle, which pressurizes beneficiaries further. Even after funds are credited to the schools bank account, significant delays are observed. While the reasons for the delay in distribution are miscellaneous, such as clerical errors in making the draft or transfer, election mandates prohibition on disbursement, school holidays, tardiness in organizing the distribution ceremony and arranging a chief guest, they are exacerbated by school officials lethargy in the absence of effective checks to ensure prompt distribution. 2 School officials in Purnea report delays of up to three months after receiving funds, with complacence typical of state functionaries. A more serious and distressing flaw in implementation is that when funds do eventually arrive, seldom is the entire allotment received. In instances when funds for less than the total class size arrive in schools, less than all eligible receive their entitlement upon distribution. These gaps open up a politics of appropriation. As there is no official policy3 outlined in the schemes guidelines for such a situation, the school staff exercises its discretion and arbitrarily distributes entitlements by roll number, highest marks, caste, or paradoxically, by good attendance. As an example, the table below reviews the gap between allotments received and the total eligible class size at a sample urban high school.

In previous years, girls have been made to open savings accounts in a local bank and the money credited by account payee cheques. This mode would confound school officials over who would pay nominal bank charges or commissions on drafts, delaying disbursement of lakhs in funds over trifles of a few hundred Rupees.
3

In some cases, school principals would ask the DEO for instructions in this situation. The DEOs recommendation would then be taken as official policy and distributions would be made accordingly.

Table 2: Allotments Received vs. Class Size (numbers denote students) (Raja Prithvichand High School, Purnea City) Year Girls Class size 2009-10 2010-11 82 62 Actual Receipt 82 42 Boys Class size 179 178 Actual Receipt 156 119 Caste Admission Number Basis of Distribution

Thus, in the failure of official administration and deployment, a scheme designed to avoid such distinctions between students succumbs to divisive competitions of appropriation. Principals have narrated instances when riled groups of students guardians would form on school premises clamoring for their wards to be selected to receive funds for a cycle and protesting the basis of distribution. As this basis is independently selected by school staff in individual schools, it is unstandardized across different high schools and can even vary by academic year within the same school. In the example above, the principal and staff decided to select caste as the basis for distribution in one year and distributed funds first to students of backward castes.4 The next year, he asked the local DEO for instructions and was told to distribute funds according to admission numbers. One principal observes that, foreseeing this problem, students from distant or rural areas who in previous years would be late in getting themselves admitted now are the first to arrive in a bid for an advantageous roll number to avoid exclusion. Not receiving the entitlement is emotionally distressing for the students excluded as the cycle is an object of immense yearning. Often, students who did not receive funds from the scheme were moved to tears during interviews, revealing the pinch of their exclusion. In such situations, school officials make a written appeal to the DEO to have the funds for remaining students sent but there is little certainty about the success of this appeal. In certain instances, the appeal went through the same process chain and money for the remaining students arrived in schools a few months later. The delay was sometimes so inordinate that the money would come with the next years allotments. In others, students graduated from school after finishing the tenth standard before there was any word of their missed entitlement. There is no official explanation given to schools for why an allotment smaller than that required was sent. Upon questioning, officials in the DEOs office denied that there is ever such a gap, except when the school admits new students after sending its class information and demand. Pressed upon, the DEOs chief secretary in Purnea admitted that such gaps in allotments do occur, because the Directorate itself sometimes sends smaller allotments than asked for. Accountability in these offices is done away with in officials responses such as lower authority never questions higher authority and that the fulfillment of the schools demand is subject to the availability of funds. The scheme structures accountability checks and transparency in delivery in the shape of a pyramid. At the lowest tier (of the distribution chain), students and parents have the greatest power and transparency measures are exercised over them. Each subsequent level of bureaucracy and government is tiered above that with increasing liberty from built in checks. Beneficiaries receipts and bicycles are both examined and the chassis numbers matched. Since bicycles are priced higher than Rs. 2000 and students cannot opt out of the scheme, beneficiaries are forced to invest additional money from home to buy a bicycle. This investment from home depends on the familys resources, ranging from a minimum of Rs. 500 (~$15) to amounts as high as Rs. 3000 (~$55), and is debilitating to the extremely poor, handicapped, and those who already own a cycle. Such checks ensure that a bicycle is actually purchased and the funds are not absorbed into the household. One tier up, lesser power is exercised over the school staff, which is only accountable to the DEO for processes such as sending the schools demand or the records of distribution. School staff employs its discretion in distributing scheme funds, for example, by selecting a bicycle store and making students
4

This school principal claimed that the selection of caste as the basis of distribution was rooted in common government practice in welfare schemes which usually offer advantages to members of lower castes.

purchase bicycles only from it. Of course, this discretion can be leveraged for considerations such as commission from the store. Further, the two process based check against misappropriations at the school level, the collection and sending of purchase invoices and distribution of beneficiaries funds in a public function, are weak. Student-supplied proofs of distribution such as invoices from local bicycle stores and signatures upon receipt of funds could easily be forged. While all Principals interviewed claimed that misappropriation was impossible, they also admitted that fraud might be happening in rural areas. The DEOs officials also reported that any inquiries into the proper implementation of the scheme and distribution of funds are conducted only if there is a complaint against a school; otherwise, the schemes process places measures for accountability of the school staff to the government only in such documentation, and once sent, it suffices as proof. The measure for transparency at the school level, the distribution of beneficiaries funds in a public ceremony, too is flawed. The scheme does not call for any information to be made publicly available: for example, the class enrollment information, date and amount of funds received by the school, and the like are unknown to students and local society. As long as the school keeps maintaining that it has not received funds and places blame on the official administration, it can postpone distribution, leaving no loopholes for beneficiaries to confront the school staff with. Of course, this is also more plausible in rural areas where distances between schools and between the school and the DEOs office in the district headquarters is significant and informal channels stifled. Thus, due to only such partial disclosure required by the schemes process, this transparency measure has mostly aesthetic significance. To reinforce it and make it effective, the distribution of funds in a public ceremony should come alongside mandatory, failsafe, and public disclosure of other information such as enrollment data and funds received. On the governments end, poor accountability measures leave problems such as gaps in allotments and delays in transfer of funds unexamined and unexplained. The process does not have any formal means of enforcing accountability on the administrative bureaucracy by school staff, beneficiaries, or local society. Within officialdom, different levels of administration exercise control over lower ones only through the slow document cycle and as the DEO official pointed out earlier, lower authority never questions higher authority.

QUALITATIVE IMPACT

The Mukhyamantri Cycle Yojana is purported to have significantly decreased dropout rates, especially among girls, and is celebrated as a qualified success in the media.5 The tangible nature and visibility of Bihars cycle schemes construct a powerful image of young girls in uniform cycling together to school every day and suggests deeper, qualitative benefits than quantifiable increases in enrollment and attendance alone. Perhaps the most important and apparent impact of the scheme qualitatively is a conceptual change in students understanding of their attendance requirement. Before the scheme was implemented, going to school only three days a week was perceived as satisfactory attendance and social convention. From interviews with teachers, students, and their parents, it appeared that prior to receiving cash for a bicycle, the very idea of obligatory daily or regular attendance was absent or at least unenforced. The states gesture through these schemes is given great importance in households and the evidence of its significance lies in the development of certain progressive norms. Parents report that receipt of the state sponsored bicycle greatly encourages them to send their wards to school daily and ensure regular attendance. They experience a greater sense of security and returns on educational investment, allowing increased independence to their daughters and sons that extends beyond going to school. They directly attribute this sense of change to the bicycle and the ethos of the state sponsoring it. For students, the value of the bicycle lies not only in the convenience it offers but also and more interestingly, as an object of their own proprietorship and liberation. In homes where parents do not explicitly encourage or perhaps even discourage their children from leaving the house (even for
5

Chief Minister Nitish Kumars blog post on Mukhyamantri Balika Cycle Yojana. April 2010. (http://nitishspeaks.blogspot.com/2010/04/mukhyamantri-balika-cycle-yojna.html) Swaroop, Vijay. Bihars Virtuous Cycle. Live Mint. August 2010. (http://www.livemint.com/2010/08/08221239/Bihar8217svirtuous-cycle.html) Debroy, Bibek. A Bicycle Built for Many. Indian Express. December 2010. (http://www.indianexpress.com/news/a-bicycle-built-formany/721798/)

school), students articulate that the bicycle gives them greater powers to negotiate with their parents. Teachers and parents note that the bicycle has inspired a feeling of excitement with regards to coming to school in students, who now maintain regular attendance even during months of peak summer or heavy rain. Beneficiaries discover greater incentive to go to school as cycling together with classmates facilitates a new social space. This phenomenon is perhaps best observed at KDS Girls High School, Kasba, where girls reveal an interesting dynamic by flocking over collectively to the corner of the schools campus where bicycles are parked, sitting on them with their tiffin boxes open, socializing and even riding their cycles together for the period of a short break. The much-valued bicycle thus seems central to social interactions and gives the students a feeling of commonality. Ownership of the bicycle lends benefits to beneficiaries even outside the context of school. Students cycle to coaching classes and engage in supplementary learning in subjects such as Computers and Spoken English. They run errands for the household and socialize by going over to friends houses. Siblings too make use of the scheme-delivered bicycle. Such increased exposure translates into important psycho-social development, especially in girls and students in madrassas. Leaving home on their own and increased social interactions has helped beneficiaries lose some of their inhibitions and made them smarter at conversation. Guardians and parents observe that their daughters display greater interest in their education and hold higher ambitions than before. The bicycle acts as a liberating agent and instills in beneficiaries greater self-confidence, independence, and empowers them socially. Bihars bicycle schemes exemplify effective policy design and serve as a useful template for other states to mirror. Within a few years of their inception, they have achieved a significant and verifiable impact. However, the archaic functionaries and administrative channels of the state plague even this new order of welfare initiatives. Until the kind of political acumen and planning that devised these schemes works to reform the logistics upon which successful implementation depends, the expensive gap between outlays and impact will be borne by their student beneficiaries.

CONCLUSION

Bihars bicycle experience is interesting in many ways. With a relatively inexpensive and simple welfare scheme, the Bihar state government leaves us with four significant lessons. The first of these pertains to high school enrolment and retention. Situating such a scheme in regions where seemingly straightforward logistical problems, such as the lack of conveyance to cover the distance to the local school, seriously come in the way of incentives to continue school enrolment. This is particularly so at the Standard IX or high school level where enrolment comes at a significant opportunity cost such as informal employment or marriage. By directly addressing this difficulty, the state enables students to continue enrolment and keeps them from dropping out. At the time of writing this paper, quantitative studies were underway to determine the precise effect the scheme has had on enrolment rates. The general observation is that the scheme has been exceptionally effective to that end. The second lesson is that, by offering the scheme directly to student beneficiaries, the state achieves greater efficacy because of the ownership exercised by the students as they gain leverage in favor of continued education. Seemingly simple incentives, like gaining a free bicycle perhaps those students only self-owned property can have transformative effects because of psychological and social associations that are made. In interviews with beneficiaries, one factor that remarkably stuck out was that owning something seems to substantially translate into strong personal investment in the actions so incentivized. By addressing students directly and making them the beneficiaries (instead of going through channels of family or guardians) and making schools the point of deployment enables such positive social effects to arise and tethers the scheme to greater success. The third insight that this experience offers is that benefits are often not restricted to quantifiable paybacks such as increased enrolment but are extended into psycho-social realms where they have the capacity to transform relationships and inculcate progressive values. This becomes especially important in constituencies that are mired by poverty, gender discrimination, and similar societal restraints. There is an important visual element as well where the very picture of girls riding together on bicycles across long distances offers a regular and accepted sign of progress and positive government intervention.

Finally, such schemes offer high returns to political considerations and re-election. By investing directly in people, the state or politician wins its constituents favor directly and perhaps more readily than by making investments that improve their lives indirectly. As the direct association and link between citizen and state is made, increased political mileage is gained. Further, in regions where corruption is a recognized norm, including measures for transparency and public accountability offers significant credibility and confidence of the people as they are together heralded into qualitative notions of change and progress.