SBI Report: Tsunami of schemes sending cash directly to women’s accounts not good for states
New Delhi| The tsunami of women-centric direct benefit transfer schemes (schemes that send cash directly into accounts) announced by states can harm their financial condition. This has been said in a report of State Bank of India. According to the report, the trend of schemes to transfer cash directly into the account to women has increased significantly in recent years, especially during elections. The report warns that such initiatives could greatly impact state finances.
Schemes to send money to account inspired by electoral politics: SBI
“The announcement of schemes from many states that send benefits directly to the account of women can harm their financial condition”, SBI said in its report The report described such announcements made by some states as purely electoral politics-driven and said that the announcement of such schemes could harm the finances of select states
According to the report, the total cost of these schemes implemented in eight states has increased to cross Rs 1.5 lakh crore, an amount which is between 3 and 11 percent of the total revenue receipts of these states. The report said some states like Odisha are in a better position to bear these costs due to higher non-tax revenues and lack of loans, but many states may face fiscal challenges in this matter.
Comments made in the report on these schemes of Karnataka and Bengal
The report cites the example of Karnataka as having allocated Rs 28,608 crore for the Griha Lakshmi scheme there, in which Rs 2,000 per month is given to the female head of the family. This amount is 11 percent of the state’s total revenue receipts. West Bengal has also been discussed further in the report. Lakshmir Bhandar Yojana of West Bengal, which gives a one-time grant of Rs 1,000 to women from economically weaker sections, costs Rs 14,400 crore or 6 per cent of the state’s total revenue receipts, SBI reported. “Delhi’s Mukhyamantri Mahila Samman Yojana, which promises Rs 1,000 per month to adult women (except certain categories), will cost around Rs 2,000 crore”, SBI said in its report. This amount is 3 per cent of revenue receipts.
Suggestion to states – Investigate your financial condition before announcing the scheme
The SBI report also said that due to increase in the trend of schemes sending cash directly to women’s accounts, there may be pressure on the Center to adopt policies related to such schemes. The report suggests that a universal income transfer scheme, made up of grants to states from the central government, could be a more sustainable alternative to such promises.
Doing so could also help reduce subsidies that disrupt the market, the report argues. According to the report, cash transfer schemes are seen as a way to empower women and garner electoral support. The report suggests that states consider their fiscal health and borrowing patterns before implementing such welfare programmes.
