Rising Fiscal Strain: The Growth of Women's Cash Transfer Schemes in India

Twelve Indian states will allocate Rs 1.68 lakh crore for women's unconditional cash transfer schemes by 2025-26, up from two states years ago. This expansion pressures state finances but reveals fiscal improvements when UCT spending is excluded. PRS Legislative Research's report highlights women-centric welfare programs' impact.

An impressive number of twelve states across India have committed to spending a whopping Rs 1.68 lakh crore on unconditional cash transfer schemes targeted at women by the fiscal year 2025-26, according to recent findings from the PRS Legislative Research think tank.

These schemes, which provide direct cash benefits to women from economically weaker sections, aim to empower this demographic through financial support. The report highlights the significant fiscal pressure these schemes are imposing, with six of the twelve states predicting a revenue deficit for this fiscal year. However, fiscal indicators improve when excluding the budget for these schemes.

While notable programs like Tamil Nadu's Kalaignar Magalir Urimai Thogai Thittam and Karnataka's Gruha Lakshmi continue to rise in allocations, there's also a cautionary note from the Reserve Bank of India. It warns that increased expenditure on such schemes could limit financial headroom for more productive economic spending in these states.

(With inputs from agencies.)