A background note can be accessed here: EAC-PM Findings on Women’s Cash Transfers
The EAC-PM working paper finds that unconditional cash transfers to women improve savings, spending patterns, and household financial resilience. To what extent should these schemes be viewed as instruments of women's economic empowerment rather than income-support programmes?
A substantial body of evidence shows that cash in the hands of women often leads to spending on food, children's education, healthcare, and other necessities, as well as to higher savings, leading to better household outcomes. It is worth noting that this inference is drawn in a comparative sense from what men do in similar circumstances. The EAC-PM working paper reinforces this evidence by showing improvements in household financial behaviour, digital payment use, and financial resilience when women receive direct transfers.
However, lasting economic empowerment requires investment in girls' education, health, skill development, and employment to strengthen their capabilities and empower them. Amartya Sen argues in his book Development as Freedom that women must be treated as active agents of change and social transformation. Schemes with unconditional cash transfers certainly provide immediate financial relief and improve household financial security. Yet they do not, by themselves, expand women's capabilities, strengthen their agency, or build long-term resilience. Instead, they risk making women perennially dependent on these transfers. Their substantive freedom needs to be expanded to enable them to achieve their true potential and enhance the overall wellbeing of households and society.
The study recommends evolving women-centric cash transfer schemes towards a "cash-plus" architecture by strengthening beneficiary targeting and linking transfers with complementary interventions. How should India determine the next generation of women-focused transfer programmes?
Cash transfer programmes to women are in operation in several Indian states under different names, such as Majhi Ladki Bahin Yojana in Maharashtra and Subhadra Yojana in Odisha. In a way, these schemes entail recognising and valuing women’s unpaid household and care work and compensating them for it. However, cash transfers alone have limited benefits. Hence, the need for a cash-plus architecture where these transfers are accompanied by investments in women's education, health, livelihoods, financial literacy, and social welfare.
Our suggestion, however, is to reverse the sequencing from ‘cash-plus’ to ‘plus-cash’. It means setting the priority order correctly: achieving foundational progress in women's capabilities and gender equity first and providing financial rewards for such progress. For instance, this could include providing cash to girls pursuing higher education, to mothers who opt for institutional delivery, to women participating in skill development and entrepreneurship programmes, to families breaking patriarchal norms such as dowry and son preference, and to schools to build girls’ toilets. Thus, a plus-cash policy design approach is more likely to achieve the goal of women’s empowerment because it links financial support with measurable social and developmental outcomes while incentivising stakeholders to advance them.
Women-focused cash transfer schemes have expanded rapidly across Indian states, representing one of the fastest-growing categories of welfare expenditure. How should governments evaluate the long-term sustainability and effectiveness of these programmes?
Schemes that directly transfer money to women have certainly had positive impacts on their households. The rapid expansion of these schemes reflects their growing political appeal and electoral prospects. They have become a prominent feature in recent political discourse, and parties compete by promising higher transfers in their election manifestos.
Governments should evaluate these schemes against improvements in women's capabilities, agency, labour market participation, and household wellbeing, alongside their fiscal implications. Large, untargeted programmes can create a heavy burden on the exchequer and generate inflationary pressure. They can also constrain public investment in education, health, rural infrastructure, entrepreneurship, and skill training. To ensure fiscal prudence, transfers should be targeted at the socially and economically weaker sections of women. In addition, such transfers should support capability development through health, education, livelihoods, and the expansion of other freedoms. A targeted, capability-oriented approach would better advance women’s empowerment, gender equity, long-term wellbeing, and fiscal sustainability.