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Why 12 states are staring at giant ₹1.7L crore bill
05 Nov 2025

Twelve Indian states will spend a total of ₹1.68 lakh crore on unconditional cash transfer (UCT) schemes for women in 2025-26, a report by PRS Legislative Research has revealed.

This is a significant increase from just two states implementing such programs three years ago.

The report also noted that six of these states are likely to face a revenue deficit in 2025-26, due to the quick expansion of women-centric welfare payouts.

Rapid expansion of UCT schemes
Welfare expansion

The UCT schemes, which aim to empower women from economically weaker households with monthly direct benefit payments, have become a key welfare feature in many states.

The number of states providing largely UCTs to women has increased from two in 2022-23 to 12 in 2025-26.

Beneficiaries are selected based on income threshold, age group and other factors.

Strain on state budgets
Budget impact

States like Assam and West Bengal have increased their allocations for women's UCTs by 31% and 15%, respectively, over the previous year.

Key schemes include Tamil Nadu's Kalaignar Magalir Urimai Thogai Thittam, Madhya Pradesh's Ladli Behna Yojana and Karnataka's Gruha Lakshmi scheme.

These provide monthly support of ₹1,000-₹1,500 to eligible women households.

However, the report warns that these schemes are putting a strain on state budgets.

Adjusting revenue balance shows improvement in fiscal indicators
Fiscal adjustment

The report said adjusting revenue balance to exclude UCT spending shows an improvement in fiscal indicators of these states.

For instance, Karnataka's revenue deficit would turn into a surplus if UCT expenditure was excluded.

Madhya Pradesh's surplus would also improve significantly under this adjustment.

The Reserve Bank of India had earlier warned that rising expenditure on subsidies and cash transfers could reduce fiscal space for productive spending.

States adjust benefits to manage costs
Cost management

To manage costs, some states have already adjusted their benefits. Maharashtra lowered monthly payouts under the CM Ladki Bahin Yojana in April 2025. These changes reflect efforts by state governments to balance welfare spending with fiscal sustainability.