Women-targeted unconditional cash transfer schemes beat expectations: EAC-PM paper
A working paper released under the Economic Advisory Council to the Prime Minister (EAC-PM) evaluated two state-level unconditional cash transfer (UCT) schemes targeted at women — the Mukhyamantri Majhi Ladki Bahin Yojana in Maharashtra and the Subhadra Yojana in Odisha — using account-level monthly panel data.
The paper found that both schemes significantly raised beneficiaries' month-end bank balances and spending, with Maharashtra's scheme raising balances by about 84% and spending by about 46%, and Odisha's scheme raising balances by about 45% and spending by 28%.
The study identified positive household spillover effects: in Maharashtra, other household members' month-end balances rose by about 23% while their spending fell by about 49%; in Odisha, a 10% rise in beneficiaries' balances was associated with a 1.9% fall in relatives' spending.
Spending-pattern analysis showed a shift toward lifestyle, medical, and educational expenses, along with increased UPI-based digital transactions among beneficiaries.
The findings come as more than 15 states have rolled out unconditional cash transfer schemes for women, with a combined estimated annual outlay of about ₹1.7 lakh crore covering close to 120 million beneficiaries.
Unconditional Cash Transfers (UCT) vs Conditional Cash Transfers (CCT)
An Unconditional Cash Transfer (UCT) is a direct cash benefit paid to a beneficiary without requiring them to fulfil any behavioural condition (such as school attendance or health check-ups), unlike a Conditional Cash Transfer (CCT), which ties disbursement to specific actions. UCTs targeted at women are premised on the idea that placing cash directly in women's hands strengthens their bargaining power and financial autonomy within the household — a concept economists term "intra-household bargaining power."
Key Details
- CCT examples in India: Janani Suraksha Yojana (institutional delivery), earlier scholarship schemes tied to school attendance
- UCT examples discussed in the paper: Mukhyamantri Majhi Ladki Bahin Yojana (Maharashtra) — monthly transfer of ₹1,500 to eligible women; Subhadra Yojana (Odisha) — biannual instalments totalling ₹10,000 per year
- Global UCT literature (e.g., GiveDirectly-style programmes) generally studies direct effects on beneficiaries; this paper's distinguishing contribution is measuring "spillover effects" on non-beneficiary household members using bank account-level panel data
- More than 15 Indian states now run women-targeted UCT schemes, with a combined estimated annual outlay of around ₹1.7 lakh crore for about 120 million beneficiaries
The paper provides an evidence base for the rapidly expanding women-centric UCT model adopted across states, going beyond simple beneficiary-level outcomes to quantify effects on the wider household.
Direct Benefit Transfer (DBT) and the JAM Trinity
Direct Benefit Transfer (DBT) is the government mechanism for transferring welfare benefits directly into beneficiaries' bank accounts, reducing leakages associated with cash/in-kind delivery through intermediaries. DBT is enabled by the "JAM Trinity" — Jan Dhan bank accounts, Aadhaar identification, and Mobile connectivity — which together allow authentication and last-mile transfer of funds without intermediaries.
Key Details
- DBT scheme launched: 1 January 2013 (initially for a limited set of schemes; scaled up from 2014-15 onward)
- Pradhan Mantri Jan Dhan Yojana (PMJDY) launched 28 August 2014 — financial inclusion scheme providing zero-balance bank accounts, the "J" in JAM
- Aadhaar Act, 2016 (a Money Bill) provides the statutory basis for Aadhaar-linked benefit delivery, upheld with modifications by the Supreme Court in Justice K.S. Puttaswamy v. Union of India (2018)
- State-level women's UCT schemes such as Ladki Bahin Yojana and Subhadra Yojana are themselves delivered through DBT/JAM infrastructure into beneficiaries' own bank accounts
The EAC-PM paper's account-level panel data methodology is itself possible only because DBT/JAM infrastructure routes these cash transfers into traceable individual bank accounts, allowing researchers to observe balance and spending changes.
Economic Advisory Council to the Prime Minister (EAC-PM) — Institutional Role
The EAC-PM is a non-constitutional, non-permanent, independent body that provides economic advice to the Prime Minister; its recommendations are advisory and not binding on the government. It comprises a Chairman, full-time members, and part-time members drawn from academia, research institutions, and industry, and its mandate includes analysing macroeconomic issues referred to it and publishing independent working papers on topical economic questions.
Key Details
- EAC-PM is reconstituted periodically (not a standing statutory body); distinct from the erstwhile Planning Commission and from NITI Aayog, which is a policy think tank with a different statutory/executive footing
- Functions: analyses issues referred by the PM; addresses macroeconomic issues suo motu or on reference; publishes working papers (this cash-transfer study was released as an EAC-PM Working Paper)
- Findings and views expressed in EAC-PM working papers do not represent official government policy positions
As an independent advisory working paper rather than an official policy pronouncement, the EAC-PM study is best read as an academic evaluation of the fiscal and welfare effectiveness of state-run cash transfer schemes rather than a government endorsement of a particular design.
- Maharashtra (Ladki Bahin Yojana): monthly transfer of ₹1,500; month-end balances up ~84%; spending up ~46%
- Odisha (Subhadra Yojana): biannual transfers totalling ₹10,000/year; month-end balances up ~45%; spending up ~28%
- Household spillover — Maharashtra: relatives' balances up ~23%, relatives' spending down ~49%
- Household spillover — Odisha: 10% rise in beneficiary balances linked to 1.9% fall in relatives' spending
- Educational expenditure share in Maharashtra beneficiaries' spending: rose from 18% to 24%
- UPI transaction basket shift: lifestyle spending share up from 37% to 42%; medical spending share up from 8% to 10%
- Estimated combined annual outlay across 15+ states' women-targeted UCT schemes: ~₹1.7 lakh crore, covering ~120 million beneficiaries