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'These payouts are unsustainable': Analyst warns as more parties announce Rs 2,500 cash for women

'These payouts are unsustainable': Analyst warns as more parties announce Rs 2,500 cash for women

'The way it's going, it looks like soon all women in India will have Rs 2,500 as passive income,' Sandip Sabharwal said in an apparent reference to schemes such as 'Ladli Behna Yojana' and 'Lakshmi Bhandar' 

AAP, Congress have announced schemes for women in Delhi AAP, Congress have announced schemes for women in Delhi

Research analyst Sandip Sabharwal has raised concerns about the growing trend of direct cash assistance schemes for women, calling them "largely unsustainable" given the strained finances of state governments.

"The way it's going, it looks like soon all women in India will have Rs 2,500 as passive income," Sabharwal said in an apparent reference to schemes such as 'Ladli Behna Yojana' and 'Lakshmi Bhandar'. 

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"Every new state election will mean another such scheme if not already on. These payouts effectively mean severe cuts in developmental and capital expenditures," he warned.  

Sabharwal's comments come in the wake of Congress announcing the 'Pyaari Didi Yojana', promising Rs 2,500 in monthly financial assistance to women if the party wins power in Delhi. The scheme is modeled on the 'Gruha Lakshmi' program in Karnataka, which has garnered significant attention in the southern state.  

Meanwhile, Aam Aadmi Party supremo Arvind Kejriwal, has already launched the Mukhya Mantri Mahila Samman Yojna in Delhi, offering Rs 1,000 per month to women, with a promise to increase the amount to Rs 2,100 after the elections. Similarly, Rashtriya Janata Dal (RJD) leader Tejashwi Yadav has pledged Rs 2,500 monthly assistance under the Mai Bahin Samman Yojna if his party forms the government.  

This trend has gained momentum since the ruling Mahayuti alliance in Maharashtra introduced a Rs 1,500 monthly cash assistance scheme for women, a move credited with helping them recover from setbacks in the Lok Sabha elections and retain power in the state. Observers say women voters, who form a significant share of the electorate, are increasingly seen as pivotal to election outcomes.  

However, financial experts are sounding the alarm. Akshat Shrivastava, a finance expert, highlighted that India's total debt, at Rs 180 lakh crore, requires annual interest payments of Rs 14 lakh crore — equivalent to 40% of the government’s revenues. "If we end up distributing wealth we don’t have, we will go bankrupt," he said.  

The Reserve Bank of India (RBI) has also flagged concerns over state finances in its recent report, 'State Finances: A Study of Budgets of 2024-25'. It warned that rising expenditure on subsidies — such as farm loan waivers, free electricity, free transport, and cash transfers — could crowd out critical investments in social and economic infrastructure.  

"States need to rationalise their subsidy outgoes, so such spending does not hamper their capacity to build essential infrastructure,” the report noted, adding that subsidies driven by populist schemes are a growing area of fiscal stress.  


 

Published on: Jan 07, 2025, 4:24 PM IST
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