Datanomics: Rise of unconditional cash transfers ahead of Bihar polls

With the Bihar Assembly elections a few months away, political parties are expected to announce a slew of promises, including unconditional cash transfers (UCT). They relate to those schemes where there are no strings attached such as PM-Kisan, Rythu Bharosa (Telangana), and Ladli Behena Yojana (Madhya Pradesh). UCT by the centre and the states increased from ₹12,188 crore in 2015-16 to a projected ₹2.80  trillion in 2024-25, according to Project DEEP's report titled ‘Unconditional cash transfer in India – Tracing the journey, shaping the future’, an organisation working  on improving direct cash transfers (DCT) system.

 

UCT now constitutes 0.87 per cent of the gross domestic product (GDP), outpacing both MGNREGA and food subsidies shares in the economy.

 

UCT share in DCT sees sharp rise 

From 2015-16 to 2024-25, both DCT and UCT have shown a steady increase in total disbursements. The share of UCT in total DCT rose significantly from 19.68 per cent to 93.01 per cent during this period. 

 

UCT disbursement: Centre vs State share 

The responsibility for these schemes has shifted significantly from the Centre to states with the Union government’s share dropping from 70.2 per cent in 2015-16 to 24.8 per cent in 2024-25, while the share of states and UTs rose to 75.2 per cent from 29.8 per cent. 

 

Women first 

The most striking feature of these transfers is their gender reorientation. Share of UCT exclusively for women has increased from a mere 0.8 per cent in 2015-16 to 53.8 per cent in 2024-25. Allocations to vulnerable groups such as senior citizens, widows, and people with disabilities, fell sharply from 99.2 per cent to 21.5 per cent over the decade.