Graduation Approach and Consumption Support Grant
The/Nudge, in partnership with State Rural Livelihood Missions, is supporting the implementation of Graduation Approach-based poverty alleviation programs under the aegis of DAY-NRLM.
Graduation Approach is a time-bound, multi-component program designed specifically for multidimensionally poor households. Among the first to adopt these programmes, Jharkhand, Assam, West Bengal, and Meghalaya are targeting tribal communities, Denotified Tribes, single-woman-headed households, and landless laborers, all supported by The/Nudge.
The approach rests on the four pillars of Social Protection, Livelihoods Promotion, Financial Inclusion and Social Empowerment, delivered sequentially over 36 months. The Consumption Support Grant (CSG) is the first intervention a household receives after selection. It bridges the gap between enrollment and the point at which a household’s new livelihood begins generating income. It keeps families fed and solvent while the program’s larger machinery gets to work.
What the Data Shows
In Jharkhand, nine in ten households’ food consumption rose after receiving the CSG. In Assam, nearly two-thirds used it to build or repair an animal shed. In Meghalaya, more than three-fifths of women made the spending decision themselves, directing most of it towards health and house repairs. In West Bengal, over 85 percent said the cash helped them avoid selling assets or taking emergency loans. 95.4 percent of surveyed households across these states said the grant met their immediate basic needs. The differences across states are explained primarily by how large the CSG was relative to each household’s annual income.
Baseline household income data ranges from ₹16,572 in West Bengal to ₹30,905 in Jharkhand. Expressed as a share of annual income, the states rank differently from a simple Rupee comparison. West Bengal’s grant, the smallest in absolute terms, represents 21 percent of a typical household’s annual income. Assam’s is the largest relative intervention at 22 percent. Jharkhand’s, despite being larger in absolute terms, amounts to only 17 percent because of the highest household incomes. Meghalaya, still mid-disbursement at the time of the survey, is at 13 percent.
The two states where the CSG represented the largest income share, Assam and West Bengal, show the highest rates of productive use. Evaluation frameworks that compare only absolute transfer sizes will consistently miss this.
Monthly Transfer vs Lump Sum
One of the programme’s most consequential design choices was whether to disburse the CSG as a single lump sum (Jharkhand and Assam) or in monthly installments (West Bengal and Meghalaya). The survey data reveals that the two approaches produce different spending patterns because they suit different needs.
Monthly-disbursement households spent significantly more on health and medicine, house repairs, and loan repayment. Recurrent cash flow suits recurrent, event-driven needs. Lump-sum households, by contrast, spent nearly half on animal shed construction, versus 20 percent in monthly states. A shed is a one-time capital investment. When the threshold amount arrives at once, households invest at high rates. The finding argues for intentionality: programs targeting one-time productive investment should consider lump-sum disbursement; those targeting enhanced access to consumption and healthcare should consider monthly tranches.
What Income Level Does and Does Not Explain
Does a household’s baseline income predict how it uses the CSG? Within states, largely no.
In Jharkhand, food shortage affected 91–94 percent of households regardless of income tertile. This is not primarily a purchasing-power problem; it is a structural food-access problem. Targeting the CSG by income level within Jharkhand would misread the demand for it. Kitchen garden investment is equally flat across income groups in all four states. Cash alone does not create kitchen gardens where none existed; it requires inputs and training, which should be bundled together, if that is the program goal.
Lessons for Cash-Transfer Architecture
India’s cash-transfer landscape has grown over the past decade, reaching hundreds of millions of households. But the policy conversation has been dominated by targeting and leakage, with little attention paid to what households do with the money and what it reveals about how transfers should be designed.
Our studies show that the relative amount matters more than the absolute amount. Evaluation frameworks that compare only absolute transfer sizes will consistently miss this. Disbursement schedule shapes spending in systematic and predictable ways. Programs targeting one-time productive investments should consider lump-sum disbursement; those targeting consumption smoothing and health should consider monthly tranches. Finally, within a state, income level is a weak predictor of how cash will be used. What predicts use is social structure. Policy that ignores this will consistently misread the evidence.
The 2,475 households in this study weighed their debts, their needs, and their aspirations against a small but meaningful sum of money that arrived, for many, when no other source of liquidity was available. The program met basic needs for 95 percent. Now the question is not whether cash transfers help, but how to design them so they help more.
Data note: The analysis covers 2,475 surveyed households across Jharkhand (n=860), Assam (n=621), West Bengal (n=519), and Meghalaya (n=475) from Inclusive Livelihood Projects of DAY-NRLM. Baseline income data are drawn from matched household baselines (n=10,094). West Bengal and Meghalaya CSG disbursements were ongoing monthly transfers at the time of the survey; their outcomes represent an interim view.
Charanjit Singh is the Former Additional Secretary, Ministry of Rural Development, Ananya Mittal is the CEO, Jharkhand State Livelihood Promotion Society and Srikanta Kumar Routa is the Director (Operations), The/Nudge.
Views are personal.