Direct cash transfers to women boost savings, spending: EAC-PM

New Delhi: Direct cash transfers to women help improve household saving and spending patterns more effectively than gender-neutral transfers, a working paper by Economic Advisory Council to the PM (EAC-PM) said, recommending expanding such schemes to combine financial support with women's economic empowerment.

The paper called for sharper beneficiary targeting and linking schemes to outcomes like improvement in children nutrition, after analysing the Mukhyamantri Majhi Ladki Bahin Yojana in Maharashtra and the Subhadra Yojana in Odisha.

These schemes "should be sustained and evolved toward cash-plus architectures, beneficiary targeting should be strengthened progressively, and transfer amounts be reviewed periodically for adequacy in light of inflation and evolving household expenditure patterns," said the paper titled 'Unconditional Women Cash Transfer Programmes in India: Evidence from Maharashtra and Odisha'.


Co-authored by Soumya Kanti Ghosh, a part time member at EAC-PM, and Shagishna K, an economist at SBI's economic research department, the paper uses account-level monthly panel data and difference-in-differences identification strategies to assess the schemes.

Both the women-centric direct transfer programmes generate large and consistent improvements in beneficiaries' savings and consumption, the paper said. Month-end account balances increased by around 84% in Maharashtra and 45% in Odisha, representing absolute gains of ₹6,884 and ₹6,887 per beneficiary, respectively, the monthly consumption spending increased by 46% and 28%, respectively.

According to the paper, cash transfer programmes targeted at women have become one of the fastest-growing categories of state-level welfare spending in India.