Odisha's Subhadra scheme boosts savings 45%, spending 28%: SBI Research

SBI Research finds Odisha's Subhadra DBT scheme has lifted savings and spending among women beneficiaries, with strong gains among financially excluded households

The Odisha government’s flagship direct cash transfer scheme for women — Subhadra (named after Lord Jagannath’s sister, Goddess Subhadra) — has significantly improved household finances, with beneficiaries recording a 45 per cent jump in savings and a 28 per cent rise in consumption, according to a new study by State Bank of India Research.

 

Using a robust difference-in-differences methodology with a sample of over 1.6 lakh individuals, including 75,750 beneficiaries and 85,588 non-beneficiaries, the study found that the Subhadra Yojana, launched in September 2024 by Prime Minister Narendra Modi, has not only strengthened women’s financial position but also triggered positive spillover effects across households and local economies.

 

The study revealed that the average six-month bank balance of beneficiaries rose from ₹15,146 (average six-month balance before getting the first instalment) to ₹22,033 after enrolment, an increase of around 45 per cent compared to non-beneficiaries. Spending levels also climbed sharply, with average withdrawals increasing from ₹6,937 to ₹8,857, reflecting a nearly 28 per cent rise.

 

"The impact was immediate, with a sharp jump in balances following each transfer, though the effect tapered gradually as funds were utilised. The transfers acted both as a consumption stabiliser and a small-scale working capital source for households," the SBI research found.

 

Women aged 45 years and above recorded the highest increase in balances at ₹8,935, largely reflecting a tendency to set aside funds for healthcare and future contingencies. In contrast, women in the 30–44 age group, considered the most economically active segment, saw relatively lower increases in savings at ₹5,924, suggesting greater consumption pressures.

 

Younger beneficiaries below 30 years recorded a rise of ₹6,133, indicating a mix of spending and precautionary savings. The scheme’s impact was more visible among the financially excluded, with illiterate women registering a 73 per cent increase in savings, while under-matric beneficiaries saw substantial gains. The results for highly educated groups were statistically insignificant, indicating that the marginal impact of the scheme is strongest among poorer and less financially included sections.

 

"The maximum increase in account balance was for aged 45 and above at ₹8,935 and for postgraduates at ₹12,452. In terms of increase in spending, those aged between 30–44 show the maximum increase at ₹2,270 and those having post graduation show the maximum increase at ₹9,280," the study stated.

 

Consumption patterns mirrored this trend too, with average spending increasing from ₹6,937 to ₹8,857, an absolute rise of ₹1,920. The increase was observed across all age groups, with the highest jump among women aged 30–44, who recorded an increase of ₹2,270, followed by younger beneficiaries. Older women showed relatively lower increases in spending, prioritising essential expenditures such as healthcare and household needs.

 

The study also found that spending spikes immediately after transfers and then tapers off, marking the role of the scheme in meeting immediate consumption needs. It highlighted how beneficiaries are utilising the funds. Around 35.7 per cent of the transfers are spent on routine household needs, including food, education and healthcare, while 25.5 per cent is used for starting small businesses or acquiring productive assets. The remaining portion is directed towards savings, debt repayment and skill development.

 

"Importantly, those women under matriculate spent the most as the increase in average balances are the least at ₹1,351 followed by the matriculate at ₹2,299 and illiterate at ₹4,485. The larger and significant increase in savings for the illiterate indicates that women with no formal education had lower initial access to financial services; the policy has improved their ability or incentive to save as well as to spend," stated the study report. 

According to the study, the financial independence of women has reduced reliance on family members after the scheme was launched. Savings of relatives, particularly husbands and fathers, also increased, indicating improved overall household liquidity due to the scheme. It has increased their control over spending and savings decisions by routing funds directly into women’s bank accounts.

 

Implemented by the Odisha government, the Subhadra Yojana provides ₹10,000 per annum in two instalments through direct benefit transfer to eligible women, aged 21 to 60, with annual family income up to ₹2.5 lakh. The scheme has rapidly scaled up, covering over 1.02 crore women across the state, with annual disbursements exceeding ₹10,000 crore.

 

While nearly 77 per cent of the women population of the state is currently covered under the scheme, the state government has planned to spend over ₹50,000 crore in five years till 2029, making it one of the largest state-level cash transfer programmes in the country.

 

The scheme is part of a broader trend, with over 15 states now running similar programmes for women, collectively costing an estimated ₹1.7 lakh crore in FY26 and covering around 12 crore beneficiaries nationwide.

 

Despite its positive outcomes, the study flagged concerns over its efficiency. Since nearly 77 per cent of women in the eligible age group in Odisha are currently receiving benefits, it raised questions about whether transfers are sufficiently focused on the most vulnerable households.

 

SBI researchers recommended refining beneficiary identification using updated socio-economic indicators and periodic revisions to ensure better alignment with the scheme’s objectives.

 

They have suggested linking cash transfers with self-help groups (SHGs), skilling initiatives, enterprise support and market access to sustain long-term impact. The study also called for revisiting the size, frequency and timing of payments to strike a balance between consumption support and savings incentives.

 

"Subhadra Yojana has demonstrated how direct benefit transfers to women can reshape household economics, enhance financial autonomy and stimulate grassroots economic growth. If effectively leveraged, the scheme could generate a gross output impact of ₹1 lakh crore to ₹1.5 lakh crore over five years through increased local demand and economic activity," the SBI study added.

 

SBI and UCO Bank act as sponsored banks in processing the payment to beneficiaries under Subhadra through DBT. SBI has a market share of 32 per cent among the overall 1.02 crore beneficiaries who have bank accounts with SBI. As per the demographic profile of the beneficiaries (SBI data), 46 per cent of beneficiaries are aged 30–44, followed by 31 per cent in the 45–59 age group and 23 per cent below 30 years, while 65 per cent are married and 21 per cent are single.