By fiscal year 2026, approximately 12 crore women received direct cash transfers as over 15 states allocated nearly Rs 1.7 lakh crore for these initiatives.
As various states implement and enhance direct cash transfer programs for women, a newly released working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) indicates these initiatives are providing substantial benefits beyond mere financial aid. The report suggests that these programs are “helping women save more, participate in formal banking and spend more confidently on essential household needs.”
The document titled “Unconditional Women Cash Transfer Programmes in India: Evidence From Maharashtra And Odisha” analyzed two significant welfare initiatives: Maharashtra’s Mukhyamantri Majhi Ladki Bahin Yojana, which offers a monthly transfer of Rs 1,500 to eligible women, and Odisha’s Subhadra Yojana, which provides biannual payments totaling Rs 10,000 each year. By examining bank transaction data, the authors assessed how consistent cash transfers influenced the financial habits of women beneficiaries.
The results reveal that women receiving these benefits tended to maintain higher bank balances at the end of each month compared to previous periods. This indicates that many beneficiaries are not spending their entire allocations immediately but are building financial reserves while also managing daily household expenses.
The research also noted increased expenditures in several vital areas, including healthcare, education, travel, and lifestyle choices. The report attributes this trend to improved financial flexibility and enhanced spending power among women who receive direct transfers.
Moreover, the document emphasizes a significant shift in financial behavior. The direct deposits into beneficiaries’ bank accounts have led to greater engagement with formal banking systems and healthier saving practices. The researchers argue that well-structured Direct Benefit Transfer (DBT) programs fulfill a dual role: they address immediate household consumption needs while also bolstering long-term financial stability.
‘Impact Extends Beyond Welfare’
Jayatri Dasgupta, Chief Marketing Officer at PayNearby and Program Director for Digital Naari, stated that DBT’s success hinges on more than just monetary transfers; it also involves instilling confidence in women regarding financial services.
“The most effective model is the one that moves beyond disbursing money to creating financial confidence. Direct Benefit Transfer has ensured that benefits reach women directly and transparently, but the real difference comes when women have access to their own bank accounts, understand how to use them, and can participate confidently in the formal financial system,” she explained.
Dasgupta highlighted the crucial role of assisted banking networks, particularly women business correspondents and ‘digital naaris,’ in facilitating women’s access to banking services, addressing their inquiries, and boosting their confidence in digital finance.
Gurjodhpal Singh, CEO of Tide India, remarked that the findings underscore a broader shift in women’s economic participation. “The findings point to an important shift in how India is approaching women’s economic participation. Direct benefit transfers are proving to be far more than a social welfare mechanism. They are strengthening women’s financial agency by giving them greater control over household finances and enabling them to save, spend and plan with greater confidence,” Singh stated.
He also mentioned that the rise in digital transactions indicates more women are becoming active players in the formal financial sector.
However, Singh cautioned that income support should be seen as an initial step rather than the ultimate goal. “Access to income support should ideally serve as a stepping stone towards greater economic independence through entrepreneurship, employment, and formal financial inclusion. As more women gain financial confidence, the real opportunity lies in helping them transition from financial inclusion to economic empowerment by expanding access to credit, business networks, skills, and digital tools. That’s where the long-term economic dividend for India truly lies,” he concluded.
