Cash transfers helped Odisha, Maharashtra women; review amount periodically: EAC-PM, Pg13

Key Highlights:

• A paper by the Economic Advisory Council to the Prime Minister (EAC-PM) recommended the continuation of cash transfer schemes for women in Maharashtra and Odisha.
• The schemes, Mukhyamantri Majhi Ladki Bahin Yojana (Maharashtra) and Subhadra Yojana (Odisha), significantly boosted beneficiaries' expenditure.
• Maharashtra's scheme led to a 46% increase in spending and an 84% rise in month-end balances for beneficiaries.
• Odisha's scheme resulted in a 28% increase in spending and a 45% rise in month-end balances.
• The paper advocated for periodic review of transfer amounts to account for inflation and evolving household spending patterns.

Detailed Insights:

• The analysis, authored by Soumya Kanti Ghosh and Shagishna K, utilized account-level monthly data to evaluate the impact of the schemes.
• For every Rs 100 of cash transferred, Rs 90 was spent, with increased expenditure observed in lifestyle, medical, and educational categories.
• The study found positive household spillover effects, improving financial positions of family members and reducing their expenditure outflows.
• Recommendations included evolving towards "cash-plus" architectures, combining income transfers with capacity-building, digital literacy, and Self-Help Group (SHG) linkages.
• The adoption of Unified Payments Interface (UPI) significantly accelerated payment receipt, highlighting a digital financial inclusion dividend.
• Women-focused transfers were noted to generate stronger developmental outcomes compared to gender-neutral transfers, consistent with global trends.

Key Concepts Involved:

• Economic Advisory Council to the Prime Minister (EAC-PM): An independent body that advises the Prime Minister of India on economic and related issues.
• Cash-plus architecture: A program design that combines direct cash transfers with complementary services such as training, health support, or financial literacy.
• Self-Help Groups (SHGs): Small, informal associations of people who come together to address common problems through mutual help and collective action.
• Unified Payments Interface (UPI): An instant real-time payment system developed by the National Payments Corporation of India (NPCI) for inter-bank transactions.