Women-centric welfare schemes account for 0.5% of India's GDP in FY25

The credit for the largest allocation in the budget for the cash transfer to women goes to Maharashtra, which has earmarked $5.4 billion, accounting for 1.1 per cent of the state's GDP

Nine states in India, which have ongoing or proposed cash transfer schemes for women, have a collective allocation of $18 billion in their budget estimates for the financial year 2024-2-25 (FY25), accounting  for 0.5 per cent of India’s  gross domestic product (GDP), according to Goldman Sachs Global Research.

 

The cash transfer schemes have become a potent instrument of political parties at the helm in states to woo women voters. One of the recent examples has been the success of the Mahayuti alliance led by BJP in Maharashtra. The “Ladki Bahin Yojana” launched by outgoing Chief Minister  Eknath Shinde this year is considered as a key factor in helping the coalition secure the second consecutive victory in the state.

 

 

The scheme provides Rs 1,500 a month for eligible women in the state. The beneficiaries identified are between the age of 21 -60 years with an annual household income of less than Rs 3 lakh.

 

The credit for the largest allocation in the budget for the cash transfer to women also goes to Maharashtra, which has earmarked $ 5.4 billion,  accounting for 1.1 per cent of the state’s GDP. 

 

It is followed by Karnataka, which launched the scheme in 2023 (with allocation of $3.6 billion), accounting for 1 per cent of the state’s GDP. Haryana’s proposed scheme with allocation of $2.5 billion comes next, followed by Madhya Pradesh at $2.2 billion. The lowest allocation is in Delhi where a scheme offering Rs 1,000 a month was given to women above the age of 18 years, with a budget of $0.2 billion.

 

Haryana has proposed the highest amount of Rs 2,100 a month to be given to women above the age of 18 years, with household income of less than Rs 2 lakh annually. It is followed by Karnataka at Rs 2,000 a month. The range varies from a minimum of Rs 1,000 to a maximum of Rs 2,100 a month.   

 

In terms of the burden of the scheme on the state economy, Goldman Sachs says Haryana will be at the top – once implemented, the scheme will account for 1.7 per cent of the state’s GDP, followed by Jharkhand  and Madhya Pradesh (1.2 per cent of GDP for both). The least impact of the scheme is in Delhi (0.2 per cent of GDP), followed by Tamil Nadu (0.4 per cent).

 

The states which had started the money transfer scheme for women earlier are Assam (in 2020) and  West Bengal (in 2021). West Bengal has allocated $1.7 billion for the scheme, accounting for 0.8 per cent of the state’s GDP and  provides Rs 1,500 a month to eligible women between the age of 25 to 60 years.