'More Savings, Better Spending': What PM's Economic Advisory Council Says On Direct Cash Transfer To Women

As states continue to roll out and expand direct cash transfer schemes for women, a new working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) suggests that these programmes are doing much more than providing financial relief. They are "helping women save more, participate in formal banking and spend more confidently on essential household needs".

The paper, "Unconditional Women Cash Transfer Programmes in India: Evidence From Maharashtra And Odisha", examined two major welfare schemes -- Maharashtra's Mukhyamantri Majhi Ladki Bahin Yojana (monthly transfer of Rs 1,500 to eligible women) and Odisha's Subhadra Yojana (biannual instalments totalling Rs 10,000 per year). Using bank transaction data, the researchers studied how regular cash transfers affected the financial behaviour of women beneficiaries.

The findings indicate that women receiving the benefits maintained higher end-of-the-month bank balances compared to earlier periods. This suggests that many beneficiaries did not spend the entire amount immediately. Instead, they were able to build financial cushions while also meeting day-to-day household expenses.

The study also found higher spending across several key categories, including healthcare, education, travel and lifestyle-related purchases. According to the report, this reflects greater financial flexibility and improved spending power among women receiving direct transfers.

Beyond consumption, the report highlights another important shift. Direct transfers into beneficiaries' bank accounts have encouraged greater use of formal banking channels and improved savings habits. According to the researchers, well-designed Direct Benefit Transfer (DBT) programmes serve a dual purpose. They support immediate household consumption while also strengthening long-term financial security.

'Impact Extends Beyond Welfare'

Jayatri Dasgupta, Chief Marketing Officer at PayNearby and Program Director, Digital Naari, said the success of DBT depends not just on transferring money but also on building women's confidence in using financial services.

"The most effective model is the one that moves beyond disbursing money to creating financial confidence. Direct Benefit Transfer has ensured that benefits reach women directly and transparently, but the real difference comes when women have access to their own bank accounts, understand how to use them and can participate confidently in the formal financial system," she said.

Dasgupta added that assisted banking networks, particularly women business correspondents and 'digital naaris', play an important role in helping women access banking services, resolve queries and gain confidence in digital finance.

Gurjodhpal Singh, CEO of Tide India, said the findings reflect a broader transformation in women's economic participation. "The findings point to an important shift in how India is approaching women's economic participation. Direct benefit transfers are proving to be far more than a social welfare mechanism. They are strengthening women's financial agency by giving them greater control over household finances and enabling them to save, spend and plan with greater confidence," Singh said.

He noted that the increase in digital transactions also shows more women are becoming active participants in the formal financial system. 

However, Singh stressed that income support should be viewed as the starting point rather than the final goal. "Access to income support should ideally serve as a stepping stone towards greater economic independence through entrepreneurship, employment and formal financial inclusion. As more women gain financial confidence, the real opportunity lies in helping them transition from financial inclusion to economic empowerment by expanding access to credit, business networks, skills and digital tools. That's where the long-term economic dividend for India truly lies," he added.