NEW DELHI: Direct cash transfers to women have rapidly become a defining feature of state welfare policy, with 12 states now implementing such schemes — up from just two in 2022-23. According to a study by PRS Legislative Research, these states are projected to collectively spend ₹1.68 lakh crore, or 0.5% of India’s GDP, on unconditional cash transfers to women in 2025-26 — more than double the 0.2% spent two years ago.
Schemes like Gruh Lakshmi in Karnataka, Ladli Behna in Madhya Pradesh, Ladki Bahin in Maharashtra, and Mukhyamantri Mahila Rozgar Yojana in Bihar illustrate how political parties across the spectrum are increasingly relying on direct payouts to women as a quick and visible welfare measure ahead of elections. While beneficiaries have welcomed the support, the mounting fiscal burden has begun straining state budgets.
States headed for elections — notably Assam and West Bengal — have raised allocations sharply. Compared to last year’s revised estimates, Assam’s outlay has increased by 31%, and Bengal’s by 15%. Similarly, Jharkhand doubled its monthly payment under the CM Maiyan Samman Yojana in October 2024, from ₹1,000 to ₹2,500 per woman.
However, fiscal constraints have forced some rollbacks. In April, Maharashtra cut monthly benefits under the CM Ladki Bahin Yojana from ₹1,500 to ₹500 for women already receiving ₹1,000 through a separate direct transfer for farmers. What began as targeted aid for farmers in Odisha has since expanded into a broader welfare trend across India.
The Reserve Bank of India (RBI) has repeatedly cautioned states about the growing fiscal impact of subsidies, farm loan waivers, and cash transfer schemes. The PRS report warns that while these initiatives are politically popular, they have significant implications for state finances.
It found that six of the 12 states offering unconditional cash transfers are expected to run revenue deficits in 2025-26. When spending on these schemes is excluded, fiscal indicators improve markedly. For instance, Karnataka’s revenue balance shifts from a 0.3% surplus to a 0.6% deficit of GSDP due to these transfers, while Madhya Pradesh’s surplus narrows from 1.1% to 0.4%.
The analysis suggests that while direct cash transfers have become an entrenched feature of welfare politics, states may soon face tough choices balancing populist commitments with fiscal sustainability.
