Maharashtra’s Ladki Bahin cash benefit scheme, as widely publicised, offers Rs 1,500 a month to every woman with a family income of less than Rs 2,50,000 annually, in the age bracket of 21 to 65 years. Although it is designed to empower women economically, it has sparked an intense debate about its implementation and impact. While some critics argue that this amount is too meagre to make meaningful difference in the lives of poor women, others dismiss it as a misallocation of taxpayers’ hard-earned money aimed at pleasing voters. A common thread in these debates is the criticism of “free doles” that are undesirable and unsustainable for the government’s finances.
The scheme has faced criticism as cash handouts offer only temporary relief. Skill development and job creation are the real solutions to poverty. Such schemes also risk fuelling inflation by boosting consumption demand. However, many countries, including Mexico (Oportunidades), Brazil (Bolsa Família), Kenya (GiveDirectly programme), the US as well as some countries in Europe, often turn to cash transfers. India, too, has a history of transferring maternal benefits, including the recent Covid-relief to women’s accounts.
In this debate, the voices of recipients are largely absent. What do they think of this ‘gift’? How do they use this gift? It is thus imperative to realise their viewpoint too. This article is based on a survey capturing views of the recipients, offering evidence-based insights into the scheme from their perspective.
Cash transfers vs subsidies
From an economic perspective, a “transfer payment” refers to the provision of money or commodities without receiving anything directly in exchange. Government transfers can be in two forms: Cash, like the Ladki Bahin scheme, or subsidised goods and services, such as free staples, cheaper LPG cylinders. While both aim to help the poor, they affect consumption differently. Direct cash transfers empower recipients to spend as they wish, enhancing purchasing power without interfering with market prices or consumer choice.
Most women in the study used the money for groceries and medicines. Such spending boosts the local economy aligning with the objective of the scheme. Some also used it for travel or their husband’s business, showing that it gave them an extra elbow room as per their consumption preference.
Despite the theoretical advantages of cash transfers, they are not without challenges. The data reveals that 30 per cent women were not registered because of barriers like misinformation and documentation hurdles. Out of these, two-thirds sought assistance from Anganwadi workers, local “party” offices or family and friends.
From registration to receipt: A broken pipeline
Even among those who navigated the registration process, success was not guaranteed. About 30 per cent of them did not receive the full amount. Registration and delays in benefit disbursement reflect administrative inefficiencies that undermine trust in the scheme. One-fourth reported that another household member also received the benefit as the scheme allows for two eligible women per house. Brazil’s Bolsa Família, which offers tiered benefits tied to household needs, could help balance fiscal constraints with varying levels of economic vulnerability.
Misinformation emerged as a significant obstacle. One respondent, a 56-year-old homemaker, was told that her family’s property tax payments disqualified her. “I found out later I could have applied, but by then it was too late,” she said. Others believed the scheme excluded women on grounds of age, although they actually fitted in the age bracket. A 62-year-old widow, misinformed and disqualified on age grounds, shared her frustration: “We have no income of our own. Who needs help more than us?” International examples like Mexico’s Prospera programme show how incorporating elderly-specific benefits can enhance inclusivity without straining budgets excessively.
Actual benefits to the “Non–poor”?
A large proportion of the surveyed women are in the “above poverty line” category. As one respondent put it, “without schooling, we don’t even know which forms to fill. The system feels impossible to navigate alone.” This is the situation in Pune city. It shows that only those who are well connected with the ecosystem get tapped.
Several women, particularly the less educated, struggled with misplaced or incomplete paperwork. These hurdles disproportionately affect the very groups the scheme aims to uplift— the elderly, the poor, and the marginalised.
Self-esteem over dole
A surprising dimension was voluntary exclusion. Out of the not registered, 20 per cent women emphasised that they did not register as they “don’t need to get money for free”. “We manage well enough,” said a 42-year-old farmer’s wife. “Why take government help when others need it more?” Another student aspired to get an education and earn, instead of receiving free doles.
Respondents also emphasised that measures to control inflation are more important than such cash distribution. A garment worker from a rural area observed, “Prices are rising so fast —this money is barely enough to buy groceries for a month. If the government wants to help us, it should control inflation.”
The real issue
Although the Ladki Bahin Scheme has been heavily criticised for imposing a significant financial burden of Rs 46,000 crore on the state exchequer, this amount constitutes just 1.1 per cent of Maharashtra’s GDP estimate for 2023-24. Spending about 1 per cent of the state’s income to support underprivileged women may not be viewed as excessive, provided it is implemented efficiently and equitably.
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The real issue isn’t whether cash transfer schemes should be implemented or whether women should receive cash. In this context, one must view the Ladki Bahin Scheme as more than just a welfare initiative — it represents a critical test of how economic tools, the banking machinery, can be officially deployed to win votes. Is it the scheme itself, or is it the timing of its announcement that is more controversial?
With more and more state governments already replicating the scheme, driven by its success in influencing voter sentiment, the key concern is that this initiative will set a precedent for similar schemes in the future.
Kulkarni is assistant professor, Gokhale Institute Of Politics And Economics, Pune. Radkar is professor and dean of academics and head, Centre for the Study of Social Exclusion and Inclusive Policy, Gokhale Institute Of Politics And Economics. The writers thank Varad Kudav and Raghav Agarwal for research assistance
