Women's Empowerment Schemes: A Growing Trend with Financial Implications
Direct cash transfers to women are gaining momentum in India, sparking both excitement and controversy.
In a significant development, 12 states across India have embraced direct cash transfers to women, a sharp increase from just two states in 2022-23. This shift is expected to cost these states a staggering Rs 1.7 lakh crore (or 0.5% of GDP) in the current year, according to a study by PRS Legislative Research.
Political parties, regardless of their affiliations, have been employing this strategy to swiftly connect with voters, especially women, ahead of elections. Schemes like Gruh Lakshmi in Karnataka, Ladli Behna in Madhya Pradesh, and Mukhyamantri Mahila Rozgar Yojana in Bihar have brought smiles to many beneficiaries. However, the financial burden on state treasuries is becoming increasingly evident.
Assam and West Bengal, gearing up for upcoming assembly elections, have notably increased their allocations for these schemes. Assam's outlay has risen by 31%, while West Bengal's has increased by 15% compared to the previous financial year. Jharkhand also joined the trend by increasing monthly payments under its CM Maiyan Samman Yojana.
But here's where it gets controversial: states often struggle to sustain these schemes due to financial constraints. Maharashtra, for instance, had to reduce the monthly benefit under its CM Ladki Bahin Yojana due to budget limitations, affecting women who were already enrolled in other direct benefit transfer programs.
This trend, which began with cash transfers to farmers in Odisha, has expanded rapidly. The RBI has expressed concerns about the escalating costs of subsidies, farm loan waivers, and cash transfers, which could impact state finances.
The PRS report reveals an intriguing insight: while six out of the 12 states implementing unconditional cash transfer schemes anticipate a revenue deficit in 2025-26, excluding these schemes' expenses improves their fiscal indicators. For instance, Karnataka's revenue surplus would turn into a deficit, and Madhya Pradesh's surplus would significantly decrease if these cash transfers were not accounted for.
And this is the part most people miss: the impact of these schemes on state finances is a double-edged sword. While they provide immediate benefits to women, the long-term sustainability of such initiatives remains a subject of debate. Are these schemes a sustainable solution for women's empowerment, or do they create a financial burden that may hinder other essential state programs? Share your thoughts in the comments!
