PM economic advisory panel recommends periodic review of women cash transfer schemes

NEW DELHI: The Economic Advisory Council to the Prime Minister (EAC-PM) has recommended periodic revisions to unconditional cash transfer (UCT) schemes for women, saying benefit amounts should keep pace with inflation and changing household spending needs.In a working paper released on Monday, the council said, "Transfer amounts of UCT should be reviewed periodically for adequacy in light of inflation and evolving household expenditure patterns, with efficiency gains from improved targeting deployed to fund enhanced benefits and complementary services for beneficiaries," as quoted by PTI.The paper, "Unconditional Women Cash Transfer Programmes in India: Evidence from Maharashtra and Odisha", assesses the impact of two major state-run schemes; which is Maharashtra's Mukhyamantri Majhi Ladki Bahin Yojana, which provides Rs 1,500 per month to eligible women, and Odisha's Subhadra Yojana, under which beneficiaries receive Rs 10,000 annually in two instalments.Based on account-level monthly panel data, the study found both schemes led to substantial gains in savings and consumption among beneficiaries."Both programmes generate large, statistically significant, and broadly consistent improvements in beneficiaries' savings and consumption. Month-end account balances increase by approximately 84 per cent (Maharashtra) and 45 per cent (Odisha), representing absolute gains of approximately Rs 6,884 and Rs 6,887 per beneficiary respectively," the paper said.

Monthly consumption expenditure also increased by 46 per cent in Maharashtra and 28 per cent in Odisha, implying a marginal propensity to consume of around 0.90, according to the study.The advisory council also recommended that the schemes be retained while expanding them into a "cash-plus" model."Both programmes should be sustained and evolved toward cash-plus architectures that combine the income transfer with voluntary capacity-building, digital literacy, and SHG linkage components," the paper said.Beyond the direct benefits to women, the study found evidence of positive spillover effects within households. It said improved financial security among beneficiaries also strengthened the financial position of their relatives while reducing their spending.Under Odisha's Subhadra Yojana, a 10 per cent increase in beneficiaries' account balances was associated with a 1.9 per cent decline in relatives' spending.

In Maharashtra, the Ladki Bahin scheme was linked to a 23 per cent increase in relatives' month-end balances and a 49 per cent decline in spending.The spending pattern of beneficiaries also shifted, with higher outlays on education, healthcare and lifestyle-related expenses, alongside greater adoption of digital payments.In Maharashtra, the share of ATM-based educational expenditure increased from 18 per cent to 24 per cent.

Among UPI transactions, lifestyle-related spending rose from 37 per cent to 42 per cent, while medical expenditure increased from 8 per cent to 10 per cent.The paper noted that women-focused cash transfer programmes have become one of the fastest-growing categories of state welfare spending in India.By FY26, more than 15 states had rolled out unconditional monthly or annual cash transfer schemes for women, with an estimated combined outlay of around Rs 1.7 lakh crore, covering nearly 12 crore beneficiaries."The number of states running such schemes increased more than fivefold between FY23 and FY26, reflecting a convergence of evidence from development economics and political economy; direct income support placed in women's hands is a powerful and cost-effective instrument for improving household welfare, advancing financial inclusion and reducing gender-based economic exclusion," the paper said.