Cash Transfers to Women Lift Family Savings, Study Finds

Akshay Modi of Sattva Consulting, a non-profit working with communities and governments, cited evidence from more than 100 studies on unconditional cash transfers. Recipients report better food security, higher income, increased savings and better psychological well-being, Modi said. They are more likely to pay off debts and remain employed, and their children are more likely to stay in school.

Shah said cash is not a substitute for everything the state does. "It is an important component of the welfare portfolio, not the only one," she said. The choice between cash and services depends on the objective, she said. Subsidies can distort markets. Investment-oriented transfers such as PM-KISAN give beneficiaries freedom over how to spend. Where the quality of government services is hard to monitor at scale, cash can give citizens more agency, she said.

From Ladki Bahin to Delhi's New Transfer

The current wave of monthly women's transfers grew out of earlier maternity benefits and incentives for girls and took off after 2020, when Direct Benefit Transfer made payments easier. The trend reached a new scale around the 2023-24 election cycle. Maharashtra's Ladki Bahin, announced after the Mahayuti alliance's setbacks in the 2024 general election, became the defining issue of the state election five months later. After the alliance won a larger-than-expected majority, its leaders credited the scheme. A Lokniti-CSDS post-election survey found that among Ladki Bahin beneficiaries, 54 per cent voted for Mahayuti, compared with half of all women surveyed.

Parties recognise that a recurring payment credited directly to a woman's account is highly visible and personally attributable, according to political analysts. The schemes are not necessarily "freebies," experts said. Shah said the Reserve Bank of India distinguishes between merit goods and other state expenditure, and the Supreme Court has drawn a similar line. On cash transfers, she said, global and Indian evidence shows they help households build productive assets and resilience. Modi said concerns about beneficiaries misusing cash are not supported by the evidence; studies show recipients are not more likely to spend on alcohol or cigarettes.

The EAC-PM paper recommends sustaining both programmes and moving toward "cash-plus" models that combine transfers with voluntary capacity-building and digital literacy. It also calls for stronger beneficiary targeting through hybrid verification, and for periodic review of transfer amounts against inflation and changing household spending. Efficiency gains from better targeting should fund enhanced benefits and complementary services, the paper said.