Impact of Cash Transfer Program on Time-Use Patterns of Agricultural Households: Evidence from India

While many developing countries, including India, increasingly started using unconditional cash transfers in agriculture (UCTAs) to improve welfare of people, the effectiveness of such policies are still being evaluated. The impact of UCTAs can be evaluated from multiple perspectives, including expenditure on inputs, allocation of time across different activities by the farmers etc. Using data from the 2019 and 2024 NSSO’s Time Use Survey, this study aims to investigate the effects of a cash transfer program – Rythu Bandhu Scheme - introduced in Telangana on the time use patterns of rural agricultural households.The time allocation in a day has been classified into activities corresponding to four broad categories: System of National Accounts (SNA) (e.g., Employment and Production-related), Extended SNA (ESNA) (e.g., Unpaid domestic services and caregiving), Non-SNA (NSNA) (e.g., Learning, Socialization and Leisure etc), and Self-care (SC) (e.g., Eating, Sleeping etc). The program’s causal impacts are evaluated separately for both periods using a Seemingly Unrelated Regression (SURE) framework to address cross-equation residual correlation. Additionally, to address selection bias, Average Treatment effects on the Treated (ATT) has been estimated ignoring residual correlation. The study also employed Propensity Score Matching (PSM), to ensure a valid quasi-experimental design. The 2019 findings demonstrate an initial trend towards more engagement in SNA and SC activities, coupled with a contraction in time spent on ESNA and NSNA activities. This pattern indicates an immediate response to the cash transfer, possibly driven by short-term adjustments in labour supply and household well-being. The 2024 estimates, on the other hand, show time use pattern that is more sustained: households engage more time on NSNA and, to a lesser extent, ESNA activities while spending less time on SNA and SC. These shifts indicate a settling into a new equilibrium facilitated by assured income from the UCTAs, where households diversify their time usage beyond the market production and prioritise leisure, learning, and social activities