According to the estimated budget for 2025-26, state governments will spend around Rs 1.68 lakh crore on women's welfare schemes, which is equivalent to about 0.5 percent of the country's GDP.

The scheme to transfer money to women's accounts has expanded from 2 to 12 states, a massive fiscal burden.

UCT To Women: Launched with the aim of empowering women, UCT (Unconditional Cash Transfer) schemes have now reached not just two but 12 states. These schemes, which send money directly to women's bank accounts, have not only gained political popularity but have also placed a significant burden on state fiscal budgets.

According to the estimated budget for 2025-26, state governments will spend around Rs 1.68 lakh crore on women's welfare schemes, which is equivalent to about 0.5 percent of the country's GDP.

Increasing expenditure on women's schemes

Compared to the fiscal year 2024-25, Assam has increased its budget allocation for such schemes for women by 31 percent, and West Bengal by 15 percent. According to a PRS Legislative Research report, these cash transfer schemes, launched under the guise of empowering women from economically weaker sections, are increasingly placing additional financial burdens on states. While such schemes were implemented in only two states in the fiscal year 2022-23, this number will increase to 12 states by 2025-26.

rising fiscal deficit

The report also states that six of the twelve states implementing UCT schemes project a revenue deficit for fiscal year 2025–26. The report indicates that when revenue balances are adjusted to exclude expenditure on these cash transfer schemes, fiscal indicators for many states appear better.

This clearly shows that UCT schemes have become a major source of revenue losses for these states. This means that these schemes, which provide direct cash assistance to women, are putting a direct strain on the state's fiscal balance.