NEW DELHI: Direct cash transfers to women have become the norm across states, with 12 now offering them, up from two in 2022-23. This year, the states are cumulatively projected to spend Rs 1,68,050 crore, or 0.5% of GDP, on unconditional cash transfers to women, a study by PRS Legislative Research has said. Just two years ago, the figure was less than 0.2% of GDP.
Be it Gruh Lakshmi in Karnataka, Ladli Behna in MP, Ladki Behin in Maharashtra or Mukhyamantri Mahila Rozgar Yojana in Bihar, parties across the political spectrum have been using cash transfers to women as a way to quickly reach out to voters ahead of polls. The beneficiaries are clearly happy, although the state exchequer feels the strain of such bounties.
Assam and West Bengal, where assembly elections are due next year, have increased allocation for these schemes. Compared to the revised estimates for the last financial year, Assam has increased the outlay by 31%, while the rise in Bengal is 15%. In Oct 2024, Jharkhand increased the monthly payout under the CM Maiyan Samman Yojana from Rs 1,000 to Rs 2,500.
Parties often have to roll back some of them as state finances do not give them headroom to spend. For instance, the report said, in April, Maharashtra reduced the monthly benefit under CM Ladki Bahin Yojana from Rs 1,500 to Rs 500 for women receiving Rs 1,000 under another direct benefit transfer scheme for farmers. A trend that started with cash transfers to farmers in Odisha has since been expanded. RBI has already cautioned states on the rising spend on subsidies, farm loan waivers and cash transfers. The PRS report says, "Among the 12 states implementing unconditional cash transfer schemes, six have estimated a revenue deficit in 2025-26. However, adjusting the revenue balance to exclude spending on UCT schemes shows an improvement in fiscal indicators of these states. That is, all other things remaining constant, these cash transfers result in Karnataka moving from a revenue surplus of 0.3% of GSDP to a revenue deficit of 0.6% of GSDP. Similarly, these transfers reduce Madhya Pradesh's revenue surplus from 1.1% of GSDP to a marginal 0.4% of GSDP."
Be it Gruh Lakshmi in Karnataka, Ladli Behna in MP, Ladki Behin in Maharashtra or Mukhyamantri Mahila Rozgar Yojana in Bihar, parties across the political spectrum have been using cash transfers to women as a way to quickly reach out to voters ahead of polls. The beneficiaries are clearly happy, although the state exchequer feels the strain of such bounties.
Assam and West Bengal, where assembly elections are due next year, have increased allocation for these schemes. Compared to the revised estimates for the last financial year, Assam has increased the outlay by 31%, while the rise in Bengal is 15%. In Oct 2024, Jharkhand increased the monthly payout under the CM Maiyan Samman Yojana from Rs 1,000 to Rs 2,500.
Parties often have to roll back some of them as state finances do not give them headroom to spend. For instance, the report said, in April, Maharashtra reduced the monthly benefit under CM Ladki Bahin Yojana from Rs 1,500 to Rs 500 for women receiving Rs 1,000 under another direct benefit transfer scheme for farmers. A trend that started with cash transfers to farmers in Odisha has since been expanded. RBI has already cautioned states on the rising spend on subsidies, farm loan waivers and cash transfers. The PRS report says, "Among the 12 states implementing unconditional cash transfer schemes, six have estimated a revenue deficit in 2025-26. However, adjusting the revenue balance to exclude spending on UCT schemes shows an improvement in fiscal indicators of these states. That is, all other things remaining constant, these cash transfers result in Karnataka moving from a revenue surplus of 0.3% of GSDP to a revenue deficit of 0.6% of GSDP. Similarly, these transfers reduce Madhya Pradesh's revenue surplus from 1.1% of GSDP to a marginal 0.4% of GSDP."
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