DBT Tsunami: Are Women-Centric Welfare Schemes Bankrupting India's States?

Is a Tsunami of Welfare Spending Crippling India's States? The Shocking Truth About Women-Centric DBT Schemes

India's states are facing a financial crisis, thanks to a wave of women-centric Direct Benefit Transfer (DBT) schemes. These programs, often implemented around election time, are showering cash on women, but are they sustainable? One prominent financial institution is sounding the alarm – and the numbers are eye-popping!

The DBT Tsunami: How Much is This Really Costing?

A recent report by the State Bank of India (SBI) paints a stark picture of these generous DBT schemes. Across eight states, the total cost has exploded to over Rs 1.5 lakh crore! That's not pocket change – it represents 3–11 percent of these states' total revenue receipts. This is no small ripple; it's a fiscal tsunami!

Schemes Under the Microscope: A Closer Look

The report doesn't pull any punches; some states' DBT schemes appear designed more for short-term political gain than long-term financial responsibility. Several states are highlighted, demonstrating the scope of the problem.

Karnataka's Gruha Lakshmi scheme: This one's a doozy. At an annual cost of Rs 28,608 crore (11 percent of the state's revenue!), it provides Rs 2,000 per month to women household heads. It’s the most expensive scheme on the list.
West Bengal's Lakshmir Bhandar scheme: This program also dishes out Rs 1,000 to women from economically weaker sections. While that’s a sizable one-time sum, it’s not as large compared to the others on this list with an annual cost of Rs 14,400 crore, equating to 6 percent of West Bengal’s revenue receipts.
Delhi's Mukhyamantri Mahila Samman Yojana: This scheme provides Rs 1,000 per month to adult women and represents a considerable amount (3 percent) at an annual cost of Rs 2,000 crore.

The financial impact varies across different states.

Who Can Afford This Spending Spree? The Fiscal Fitness Test

The SBI report makes it clear that not all states are created equal when it comes to financing these mega-schemes. Odisha, for example, seems better prepared thanks to solid non-tax revenues and low borrowing. But others face serious financial risks. For example, states like Karnataka are pushing their financial limits while implementing the Gruha Lakshmi scheme.

Fiscal Prudence: Where Did it Go?

Many states have gone way beyond normal, healthy spending rates.

The Ripple Effect: A National Concern

The financial burden on these states is immense. But the report raises even greater concern, forecasting the danger of these fiscal schemes. As several states introduce such initiatives, it has created significant ripple effects across different sectors of India. It warns of potentially significant increases to the National Deficit and increased pressure for the central government to introduce similar schemes, even potentially on a pan-India level. The central government could soon be overwhelmed by these state-level welfare programs. This would require intervention at a level far beyond the original spending budget and planning stages.

Is There a Way Out? Towards a National Solution

The SBI recommends a comprehensive and careful fiscal analysis of the existing plans for financial sustainability. It adds the suggestion that implementing a universal income transfer scheme (with matching grants from the central government) could bring down many costly subsidies. It might be seen as a fair solution as it is more inclusive, providing a broader reach across different levels of the financial spectrum and more importantly more fiscally sustainable across multiple states. These are all complex solutions requiring multiple governmental and legislative interventions to establish sustainable changes. Such a national plan would bring far more sustainability than state-level interventions such as those outlined previously in this article.

Take Away Points

Women-centric DBT schemes have massive costs. In many cases these schemes, though generous, show little regard for the long-term consequences for several states.
The financial health of some states is significantly strained by these schemes.
There’s a genuine concern that similar schemes will become a requirement for future stability.
The central government needs to seriously consider introducing an income transfer scheme and consider financial intervention as soon as possible.