Cash transfer programmes targeting poor women in Maharashtra and Odisha have significantly improved beneficiaries' savings and household spending on health and education, according to a working paper released by the Economic Advisory Council to the Prime Minister (EAC-PM). The paper, published on 6 July, draws on monthly bank account data to assess the real-world impact of two state-run schemes.

What the Study Examined

Titled 'Unconditional Women Cash Transfer Programmes in India: Evidence from Maharashtra and Odisha', the working paper analyses Maharashtra's Mukhyamantri Majhi Ladki Bahin Yojana and Odisha's Subhadra Yojana. The Maharashtra scheme disburses ₹1,500 per month (₹18,000 annually) to eligible women, while the Odisha scheme provides ₹10,000 in two instalments over the year. Both are unconditional transfers — recipients face no requirement to spend the money in prescribed ways.

Key Findings: Savings and Spending Both Rose

The EAC-PM paper found that Maharashtra's Ladki Bahin programme raised beneficiaries' month-end bank balances by approximately 84 per cent, or ₹6,884 per beneficiary. Monthly spending by the same group rose by 46 per cent, or ₹1,349. The estimated marginal propensity to consume was around 0.90 — meaning beneficiaries spent nearly 90 paise of every additional rupee received while still accumulating savings, a pattern the paper attributes to significant liquidity constraints among low-income households.

The study further noted that both programmes generated positive spillover effects across the household — improving the financial positions of other family members while also reducing their expenditure outflows on necessities.

Why Women-Focused Transfers Outperform Gender-Neutral Ones

The paper situates its findings within a broader global evidence base, noting that women-focused transfers consistently generate stronger developmental outcomes than gender-neutral schemes. In the Indian context, the study highlights that digital payment infrastructure has materially strengthened these mechanisms, enabling direct, verifiable disbursements into individual bank accounts. This is notably in line with the expansion of the Jan Dhan-Aadhaar-Mobile (JAM) architecture over the past decade.

Recommendations: Cash-Plus Architectures and Better Targeting

The EAC-PM paper recommends that both programmes be sustained and evolved into cash-plus architectures — combining income transfers with voluntary capacity-building, digital literacy training, and linkages to self-help groups (SHGs). On beneficiary identification, it calls for progressively strengthening targeting through hybrid multidimensional verification frameworks that improve precision without excluding deserving women.

The findings arrive at a time when several Indian states have launched or expanded direct benefit transfers for women, making the evidence base around their fiscal and social returns increasingly relevant to policymakers at both the state and central levels.