Bhubaneswar: With Direct Cash transfer schemes being the vote winner for political parties across the spectrum, including BJP, Finance Minister Nirmala Sitharaman may announce a direct cash transfer scheme for women in her 7th consecutive budget on Feb 1.
The expectation that Finance Minister may be going for the direct cash transfer to women in her budget has not been only on political ground, rather, the expectation, hinges more on sustainable combined finances of the Centre and states (where there is risk of increased market borrowings and shrinking of revenue surplus or worsening of revenue deficits of states tha twould derail the combined defict of centre and states) .
The hunch with regard to introduction of direct cash transfer to women has been made by nation’s largest public sector bank – the State of Bank of India.
The SBI’s Chief Economic Advisor Dr Soumya Kanti Ghosh in his Union Budget 2025 Preview writes:
“In a bid to woo women voters in the elections, all the parties have announced state's women-centric schemes, which give direct cash transfer ranging from Rs 1000-2000 per month. The total cost of 8 states amounts approx to Rs1.5 lakh crore, which varies 3-11% of the state's revenue receipts. There is a need to have a holistic view on schemes. “
Dr Ghosh added that while some states have the capacity to pay for such schemes, at a broader level, the welfare expenditure should be looked at vis-à-vis their respective fiscal situation and borrowing pattern.
Take a look at the tables given below and measure the impact of state specific women centric schemes.
TABLE – 1
TABLE – 3 The women schemes taxing a significant chunk on revenue receipts of the states, which have launched direct cash transfer schemes
TABLE – 3 How the schemes have impacted the respective states gross market borrowings
STATES | FY 14 | FY 24 | FY 25 (BE) till 22 Jan 2025 | FY 24 times (X) of FY 14 |
MADHYA PRADESH | 0.11 Lakh Cr | 0.39lakh cr | 0.35 lakh cr | 3.6 |
KARNATAKA | 0.16 Lakh cr | 0.81 lakh cr | 0.55 lakh cr | 5.2 |
MAHARASHTRA | 0.24 lakh Cr | 1.10 lakh cr | 0.81 Lakh cr | 4.6 |
WEST BENGAL | 0.26 Lakh Cr | 0.70 lakh cr | 0.43 Lakh Cr | 2.7 |
TAMIL NADU | 0.23 lakh cr | 1.13 lakh cr | 0.84 lakh cr | 4.8 |
JHARKHAND | 0.05 lakh cr | 0.01 lakh cr | 00000 | 0.2 |
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WHY SBI REPORT SEE CENTRE BRINGING DBT FOR WOMEN?
The Chief Economic Advisor of SBI, Dr Soumya Kanti Ghosh observed:
“Of late, there is a Tsunami of women centric schemes unleashed by multiple states offering direct benefit transfers (some badly guised as pure electoral realpolitik, we believe) that can bleed select states’ finances going forward as the wedge between revenue receipts and such expenditures may vault to 3-11% of the states revenue receipts…”
Dr Ghosh further added that with income transfer to women likely to be promised competitively by states in future, even the Union may be tempted to follow suit.
“Therefore, it would be worth taking course to adopt a universal income transfer scheme (matching grant from center to states) towards substantially reducing several market disturbing subsidies,” he observed.
