New Delhi, July 6 -- The Economic Advisory Council to the Prime Minister (EAC-PM) has called for periodic reviews of unconditional cash transfer (UCT) schemes for women to ensure benefits remain adequate as inflation rises and household spending patterns change.

In a working paper released on Monday, the council said transfer amounts should be revised from time to time, with savings from better targeting used to increase benefits and support complementary services for beneficiaries.

The paper, titled Unconditional Women Cash Transfer Programmes in India: Evidence from Maharashtra and Odisha, examined two major state schemes using account-level monthly panel data. These include Maharashtra's Mukhyamantri Majhi Ladki Bahin Yojana, which provides eligible women Rs 1,500 every month, and Odisha's Subhadra Yojana, under which beneficiaries receive Rs 10,000 annually in two instalments.

According to the study, both programmes produced "large, statistically significant, and broadly consistent improvements" in beneficiaries' savings and spending. Month-end account balances rose by about 84 per cent in Maharashtra and 45 per cent in Odisha, translating into gains of around Rs 6,884 and Rs 6,887 per beneficiary, respectively.

Monthly consumption increased by 46 per cent in Maharashtra and 28 per cent in Odisha, with the paper estimating a marginal propensity to consume of about 0.90.

The study also found benefits extending beyond the recipients. Under Odisha's Subhadra Yojana, a 10 per cent increase in beneficiaries' account balances was linked to a 1.9 per cent decline in relatives' spending. In Maharashtra, relatives' month-end balances increased by 23 per cent while their spending fell by 49 per cent.

The paper recommended that both schemes continue while gradually adopting a "cash-plus" model that combines financial assistance with voluntary skill development, digital literacy and self-help group linkages.

It also noted changes in spending patterns, with greater spending on education, healthcare and lifestyle needs alongside higher UPI usage. In Maharashtra, education-related ATM expenditure rose from 18 per cent to 24 per cent, while lifestyle-related UPI spending increased from 37 per cent to 42 per cent and medical spending from 8 per cent to 10 per cent.

The report said women-focused cash transfer programmes have become one of the fastest-growing areas of state welfare spending. By FY26, more than 15 states had introduced such schemes, reaching nearly 12 crore women at an estimated annual cost of about Rs 1.7 lakh crore. The number of states operating these programmes increased more than fivefold between FY23 and FY26, reflecting growing evidence that direct income support to women can improve household welfare, strengthen financial inclusion and reduce economic inequality.

Published by HT Digital Content Services with permission from Millennium Post.