Every month, Rekha receives ₹1,000 from the Ladli Behna Yojana in her bank account. She calls it her “salary.” It is not enough to transform her circumstances, but it is hers. With it, she can buy household essentials, pay down debts, or help her daughter with stationery. For the first time, she feels acknowledged by her family and the country, not just as a dependent but as a citizen with choice and agency.

Across India, such stories are unfolding at scale. Over the last five years, more than 14 states have introduced women-centric cash transfer programs, reaching over 110 million women — nearly a fifth of India’s adult female population. These schemes typically offer ₹1,000–₹2,000 per month, are largely unconditional, and directly target adult women in low-income or non-tax paying households.

This is more than a redistribution of resources — it is a reimagination of welfare. The critical question now is: Is cash, as currently designed and delivered, empowering women?

A Political - Policy Pivot

India has a long history of women-focused welfare schemes, but they often come with conditions - attending school, institutional childbirth, or immunisation. These models, while quite effective for the intended objectives, often saw women as conduits for developmental outcomes. Critics of such conditional approaches have pointed out that they risk reinforcing traditional gender roles — framing women primarily as mothers or caregivers in schemes like Janani Suraksha Yojana, without necessarily empowering them beyond traditional roles.

In recent times, unconditional cash transfers aimed at women have been launched across India, particularly at politically pivotal moments — from West Bengal’s Lakshmir Bhandar ahead of the 2021 Assembly elections, to Madhya Pradesh’s Ladli Behna Yojana in the run-up to the 2023 polls. However, despite the glaringly obvious political timing, these schemes reflect more than just electoral strategy. Their design — regular, direct, and individualised — points to an evolving understanding of women not just as voters to be courted, but also as economic actors whose empowerment can shift household dynamics, local economies, and long-term outcomes.

Beyond Optics

The underlying premise is simple, but powerful: when women receive a predictable income in their own name, it strengthens their ability to make decisions — both within the household and beyond. Experimental studies have shown that when cash is directed to women, it leads to more balanced household spending — particularly on areas like nutrition, healthcare, and children’s education.

Autonomy in Daily Decisions

A 2023 study of the Lakshmir Bhandar Scheme in West Bengal found that:

  • 85.6% of women said the cash gave them greater say in household decisions.
  • 61% felt their status within the family improved.

For many women, this money is the first income that they have ever received — and it gives them a say in financial matters, even if it falls short of complete economic independence.

Tangible Boost in Local Consumption

In Madhya Pradesh, SBI Research found that Ladli Behna Scheme beneficiaries spent ₹9,302 more per person at local merchants compared to non-beneficiaries. Spending patterns across schemes suggest common priorities — groceries and daily essentials, children’s school fees and supplies, medicines and health expenses, debt repayments and small savings. The study shows that even modest transfers can stimulate rural economies by increasing liquidity at the bottom tier.

From Stipend to Seed Capital

While most women spend the funds from these cash transfers on essentials, a small but growing number treat it as seed money. In West Bengal, 6.3% of women used the money to aid small enterprises — buying livestock, farming inputs, or goods for home-based businesses. In Karnataka, some women have pooled savings to purchase tools, phones for their children’s studies, or to access microcredit.

Increased Financial Visibility

Reports from the ground have shown an increase in women’s interaction with the formal financial system. Long queues at ATMs, SMS balance checks, and first-time visits to banking agents are becoming everyday occurrences. For many, these are not just transactions — they mark a shift from financial invisibility to agency and awareness.

Design Choices That Are Making a Difference

Across schemes, some key design choices stand out:

  • Unconditionality signals trust in women’s judgement. It acts as a starting point by removing entry barriers and opens the door to deeper engagement with other public services.
  • Individual disbursement builds identity. Receiving money in their name affirms women’s status as direct beneficiaries and anchors them more firmly in the formal financial system.
  • Monthly pay-outs offer predictability. They help women manage household budgets and reduce short-term financial stress.
  • Large-scale outreach ensures reach. Camps and enrolment drives have helped register women who may otherwise have remained invisible to the system.

These features make the schemes simple, scalable, and low-friction — three qualities that are rare in social protection architecture.

Where Design Still Falls Short?

Financial Inclusion Is Not Automatic

In many states, women receive funds in joint accounts — often with husbands or male relatives. In West Bengal, over 40% of recipients fall into this category, weakening the intended empowerment. Without digital literacy or confidence, many women must rely on others to access their money.

Cash Alone Cannot Build Mobility

Most schemes operate in isolation from skills training, microcredit, SHGs, or livelihood platforms. While Madhya Pradesh’s Ladli Behna has begun experimenting with “cash-plus” services like education & skilling support, the rollout remains fragmented. Without these linkages, the schemes risk plateauing as consumption support instead of being stepping stones towards social and financial mobility.

Administrative Hurdles Undermine Credibility

Some states leveraged frontline networks for beneficiary identification, but many others have struggled with even basic screening. In Maharashtra, reports of women from higher-income groups receiving benefits revealed flaws in income checks. In Chhattisgarh, the approval of an application under the name “Sunny Leone” exposed much deeper cracks in verification systems. These lapses, though not uncommon at scale, raise concerns about the integrity and long-term credibility of such programmes.

The Opportunity Cost is Substantial

These schemes are broadly universal within eligibility bands. With major states together allocating over ₹1 lakh crore annually , the fiscal footprint is significant. While the investment may be justified by social returns in the longer run, it inevitably raises questions around trade-offs and long-term sustainability of unconditional cash transfers, especially in the face of competing development priorities.

Transaction to Transformation

For cash to move from relief to resilience, these cash transfer programmes must evolve with time.

Target Better, Reach Deeper

Inclusion is meaningful only when it is accurate. While the broad eligibility of current schemes has enabled wide reach, states must now invest in smarter, data-driven targeting to ensure the benefits reach women who genuinely need them. Income declarations and exclusion criteria need routine cross-verification — with tax records, asset ownership (like four-wheelers), and household registries — to curb misallocation.

Ensure Control, Not Just Coverage

States need to enforce individual account ownership, especially in contexts where joint accounts dilute agency. Alongside, there is a need for basic digital and financial support — from how to read a balance SMS to how to file a grievance — so women not only receive funds, but own the experience of financial inclusion. Ensuring control would also need a mindset shift. Governments can drive this by embedding simple, repeated messaging: this is her money — not assistance, but rightful income.

Cash with a Ladder

Cash offers a cushion — but long-term empowerment requires pathways for upward mobility. States can create opt-in pathways for interested beneficiaries to access skill-building programs, SHG networks, microcredit, or basic business toolkits. The goal is not to burden the transfer with conditions, but to place optional opportunities within reach.

A Design that Listens

States should institutionalise regular impact evaluations, tracking not just disbursal volumes, but how women are spending the funds, what barriers persist, and where the next layer of support is needed. Odisha’s partnership with academic institutions for real-time evaluation of its Subhadra Scheme offers a strong example. Embedding feedback loops into programme architecture — and sharing those insights across states — can help India’s cash transfer ecosystem grow stronger, smarter, and more responsive over time.

States should institutionalise regular impact evaluations, tracking not just disbursal volumes, but how women are spending the funds, what barriers persist, and where the next layer of support is needed. Odisha’s partnership with academic institutions for real-time evaluation of its Subhadra Scheme offers a strong example. Embedding feedback loops into programme architecture — and sharing those insights across states — can help India’s cash transfer ecosystem grow stronger, smarter, and more responsive over time.

Because empowerment is not delivered — it is enabled. And if India is serious about empowering women, the goal must be not just to transfer cash, but to transfer control. The next step is to listen — to how women spend, save, speak – and design forward from there; not just with intent but with insight. The question is no longer whether to give — but how to give in ways that open doors rather than just fill gaps.

References