Monthly Cash Transfers to Women

Why many Indian states started paying women a fixed monthly amount, what these schemes might achieve, and the debate over their fiscal cost.

Since 2023, a wave of Indian states has launched schemes paying women a fixed amount each month, usually directly into their bank accounts. Examples include:

Madhya Pradesh’s Ladli Behna Yojana, launched in 2023.
Karnataka’s Gruha Lakshmi, paying 2,000 rupees a month to women heads of households.
Maharashtra’s Ladki Bahin Yojana, launched in 2024.
Similar schemes in states such as Jharkhand, Tamil Nadu, West Bengal and others.

Payments typically range from about 1,000 to 2,500 rupees a month.

The case for

Women’s autonomy: money in women’s own accounts may increase their say in household decisions.
Poverty reduction: regular income helps poor households with food, education and health.
Evidence from other countries shows cash transfers generally increase spending on essentials and do not reduce work much.
Simplicity: direct transfers have low administrative costs and less leakage, thanks to bank accounts and Aadhaar.

The case against

Fiscal cost: these schemes cost states large sums, sometimes a significant share of their budgets, potentially squeezing spending on infrastructure, schools and health.
Targeting: some schemes reach many non-poor households, while some poor women may be excluded.
Politics: critics see some schemes as election tools rather than well-designed policy.
Sustainability: once launched, such payments are hard to reduce.

What we don’t know yet

These schemes are recent, and rigorous evaluations of their effects on women’s empowerment, nutrition and work are still emerging.

Design questions

Should payments be universal or targeted?
Should they be conditional, for example on children’s schooling?
How should they be financed?

The household budget

A woman in Madhya Pradesh receives a monthly transfer in her own bank account. She uses it to buy school supplies and save a little each month. For the first time, she has money that she controls directly.

Thinking cash transfers always make people stop working

Evidence from many countries finds cash transfers have little effect on work, and sometimes increase it by helping people invest.

Key takeaways

Many states launched monthly cash transfers to women from 2023.
Supporters cite women's autonomy, poverty reduction and simplicity.
Critics worry about fiscal costs, targeting and politics.
Rigorous evidence on these recent schemes is still emerging.