Cash transfers have emerged as a prominent welfare tool in India’s recent development landscape. Initially conceived as targeted social support, they now also shape electoral politics and gender inclusion narratives. Several Indian states have introduced unconditional cash transfers (UCTs) for women, aiming to reduce poverty, strengthen household welfare, and enhance women’s agency.
While critics term them “freebies,” early outcomes suggest these transfers play a significant role in improving consumption stability, savings, and empowerment in female-headed or low-income households.
Changing Socio-Political Context Of Cash Transfers
Political empowerment Of women
The rise of women as a decisive voting bloc has reshaped welfare priorities. Female voter turnout has matched or exceeded that of men in several elections, prompting governments to design schemes that directly address women’s economic vulnerabilities.
Such programmes reflect both recognition of women’s electoral influence and the persistence of a patriarchal welfare state, which positions women primarily as beneficiaries within familial roles rather than as independent rights holders.
Digital Infrastructure As An Enabler
India’s extensive digital public infrastructure—comprising Aadhaar, Jan Dhan Yojana, and Direct Benefit Transfer (DBT)—has revolutionised welfare delivery. These systems ensure transparency, minimize leakages, and allow benefits to reach women’s bank accounts directly.
Studies indicate positive spillovers such as improved household savings, better education expenditure, and enhanced food security.
Economic Marginalisation And Labour Exclusion
Despite progress in literacy and social participation, women’s access to formal employment and assets remains limited. The female labour force participation rate (FLFPR) in rural India fell from 10.5% in 2017–18 to 7.8% in 2023–24, underlining the persistent exclusion from productive work.
Cash transfers—typically between ₹1,000 and ₹2,500 monthly—provide essential financial support, particularly for low-income or single women lacking access to steady income.
The Evolution Of Cash Transfers As A Development Instrument
Global Rise Of Social Transfers
In developing economies, both conditional (CCTs) and unconditional (UCTs) cash transfers have become critical in combating poverty and promoting equity.
Termed the “entitlement revolution”, this trend reflects a shift toward recognising welfare as a right rather than charity. Globally, evidence shows that these programmes enhance food security, education, health outcomes, and women’s economic empowerment.
India’s mixed approach
India’s welfare architecture integrates both conditional and unconditional transfers.
- CCTs: Janani Suraksha Yojana and Pradhan Mantri Matru Vandana Yojana encourage institutional deliveries and maternal health.
- UCTs: PM-KISAN and the Indira Gandhi National Old Age Pension Scheme offer direct financial support without conditions.
States have adapted these models into gender-focused UCTs for women, combining welfare goals with electoral appeal.
Universal Basic Income And The Gender Lens
Rationale For UBI
The Economic Survey (2016–17) proposed a Universal Basic Income (UBI) as a simplified mechanism to reduce targeting errors and improve welfare efficiency.
It estimated a transfer of ₹7,620 per person annually (at 2016–17 prices) to cover 75% of India’s population. The concept aimed to replace fragmented subsidies with a unified safety net, reducing administrative overheads and leakages.
The UBI For Women Model
Recognising fiscal limits and gender disparities, the Survey advanced a “UBI for women” proposal—directing income support exclusively to women to halve costs while maximising household impact.
This approach has inspired many state-level UCTs where adult women receive monthly payments subject to income and age criteria. However, most exclude taxpayers and government employees, making them quasi-targeted rather than universal.
State-Level Programmes And Policy Variations
Expansion And Design Diversity
Since 2020, multiple states have introduced gender-focused cash transfer programmes—Goa’s Griha Aadhar, Assam’s Orunodoi, West Bengal’s Lakshmir Bhandar, Karnataka’s Gruha Lakshmi, Tamil Nadu’s Kalaignar Magalir Urimai Thittam, and Maharashtra’s Majhi Ladki Bahin Yojana.
These typically offer ₹1,000–₹2,500 per month to adult women, identified through income and household data. Collectively, these schemes reach nearly 20% of India’s adult female population.
Labelled Versus Unlabelled Transfers
Assam’s Orunodoi Scheme is distinctive for its “labelled” structure—it suggests expenditure categories such as medicine, pulses, and fruits, subtly encouraging spending on nutrition and health without imposing strict conditions. This hybrid approach balances autonomy with behavioural guidance.
Fiscal Sustainability And Budgetary Pressures
According to PRS Legislative Research (2024–25), nine states together allocated over ₹1 lakh crore to women-focused UCTs. States like Karnataka and Maharashtra are major spenders, while fiscally weaker states such as Punjab and Chhattisgarh face challenges sustaining large-scale transfers. The debate now centres on whether short-term welfare can coexist with fiscal prudence.
Gendered Language And Welfare Framing
Scheme names—Ladli Behna, Gruha Lakshmi, Maiya Samman—invoke familial roles, portraying women as dependents. While they promote visibility of women’s issues, such narratives also reinforce patriarchal norms by limiting empowerment to domestic identity rather than economic autonomy.
Socio-Economic Impacts And Emerging Evidence
- Household consumption and welfare gains: Studies show that most beneficiaries use the cash for essentials such as food, education, and fuel. The predictability of monthly transfers allows better financial planning, stabilising consumption in low-income households.
- Recognition of unpaid work: Tamil Nadu’s Kalaignar Magalir Urimai Thittam is notable for explicitly linking income support to women’s unpaid domestic and care labour. It acknowledges “time poverty” and symbolically compensates women for invisible contributions that sustain households.
- Decision-making and intra-household agency: Evidence from Assam and West Bengal indicates that access to personal income strengthens women’s voice in family budgeting and decisions related to health and education. The psychological effect of financial independence enhances dignity and self-confidence.
- Savings behaviour and financial inclusion: Women recipients increasingly save small portions of transfers in self-help groups or bank accounts. Data from Ladli Behna Yojana in Madhya Pradesh shows that about 13% of beneficiaries maintain balances above ₹7,500, signalling an emerging habit of financial discipline.
- Structural barriers and access gaps: Despite digital infrastructure, many rural women face physical and technological barriers in accessing funds. For instance, less than 12% of Karnataka’s villages have a bank branch, limiting the practical reach of DBT systems. Expanding last-mile banking access and financial literacy remains crucial.
Policy Reflections And Way Forward
- Short-term relief versus long-term empowerment: Cash transfers provide immediate economic relief but cannot alone transform structural inequalities. Without complementary reforms in employment, education, and asset ownership, UCTs risk becoming cyclical welfare rather than enabling empowerment.
- Integrating welfare with opportunity: Future policy should align cash transfers with skill development, entrepreneurship, and digital access programmes. Linking income support with productive capacity-building can convert welfare into a pathway for upward mobility.
- Institutional strengthening and fiscal prudence: Sustaining UCTs requires robust fiscal management and evidence-based evaluation. Transparent auditing, periodic beneficiary verification, and integration with financial inclusion drives can enhance efficiency and legitimacy.
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