12 states to spend Rs 1.68 lakh crore on women’s cash schemes: PRS Report
The report noted that six of these 12 states have projected a revenue deficit this year, highlighting growing fiscal pressure linked to rapid expansion of such schemes
A total of 12 Indian states are set to collectively spend Rs 1.68 lakh crore on unconditional cash transfer (UCT) schemes for women in 2025-26, a sharp increase from just two states implementing such initiatives three years ago, according to a new report by the think tank PRS Legislative Research.
The report noted that six of these 12 states have projected a revenue deficit this year, highlighting growing fiscal pressure linked to the rapid expansion of women-focused welfare schemes.
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"Among the 12 states implementing UCT schemes, six have estimated a revenue deficit in 2025-26. However, adjusting the revenue balance to exclude spending on UCT schemes shows an improvement in fiscal indicators of these states," the report said.
Rising focus on women’s welfare
UCT schemes, designed to empower women from economically weaker households through direct monthly payments, have become a key component of welfare policy in several states.
The number of states offering largely unconditional cash transfers to women has increased from two in 2022-23 to 12 in 2025-26.
Beneficiaries are typically identified on the basis of income thresholds, age, and other eligibility criteria.
States such as Assam and West Bengal have significantly raised allocations for women’s UCTs over the previous year, by 31 per cent and 15 per cent, respectively.
UCT schemes strain state finances
Prominent initiatives include Tamil Nadu’s Kalaignar Magalir Urimai Thogai Thittam, Madhya Pradesh’s Ladli Behna Yojana, and Karnataka’s Gruha Lakshmi scheme, each providing monthly support ranging from Rs 1,000 to Rs 1,500 for women in eligible households.
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However, the report cautioned that these programmes are exerting additional pressure on state budgets.
Adjusted fiscal estimates suggest that Karnataka, for instance, would shift from a revenue deficit of 0.6 per cent of its GSDP to a surplus of 0.3 per cent if UCT expenditure were excluded. Similarly, Madhya Pradesh’s surplus would rise from 0.4 per cent to 1.1 per cent.
RBI flags increasing expenditure on subsidies
The Reserve Bank of India (RBI) has previously warned that increasing expenditure on subsidies and cash transfers targeting women, youth, and farmers could limit fiscal space for productive investment.
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Some states have already adjusted benefits to manage costs. In April 2025, Maharashtra reduced monthly payouts under the CM Ladki Bahin Yojana, while Jharkhand raised payments under the CM Maiyan Samman Yojana to Rs 2,500 per month in late 2024.
(With agency inputs)