Maharashtra’s cash transfer scheme boosts women’s independence amid scrutiny and exclusions

The Ladki Bahin scheme in Maharashtra has provided women with financial control and political support, but recent verification efforts have cut nearly 38% of beneficiaries, raising questions over fiscal management and programme effectiveness.

Until recently, Nirmala Bawaskar had never held a bank account in her own name. The widow, who works as a housemaid in Maharashtra’s Sambhajinagar district, says the monthly cash she began receiving through the state’s Ladki Bahin scheme gave her something rare in a poor household: control over money. “Though it is a small amount, it really helped us, especially with medical expenses,” she said. “I was so motivated by it that I even learned how to write.”

The programme, formally called Mukhyamantri Majhi Ladki Bahin Yojana, was rolled out in June 2024 and soon became one of Maharashtra’s most politically charged welfare measures. It offers 1,500 rupees a month to eligible women aged 21 to 65 from lower-income households, excluding income taxpayers, government staff and families already receiving similar support. Announced shortly before a tight state election, it was promoted by the ruling alliance as a way to recognise women’s unpaid work, while the opposition dismissed it as a pre-poll handout.

That political gamble appears to have paid off. The alliance returned to power with a larger majority than many observers expected, and a post-election survey by Lokniti-CSDS suggested the scheme helped reinforce support among women voters. Even so, researchers warned against treating that as proof of a lasting welfare bloc. Women were only slightly more likely than men to back the alliance, according to the survey analysis.

The programme’s popularity has now been matched by scrutiny. India’s Comptroller and Auditor General said last month that Maharashtra’s Women and Child Development Department overspent its authorised budget by 35.41 billion rupees, taking total spending in the scheme’s first financial year to 332.37 billion rupees. Livemint reported that the auditor also criticised the parking of 15.586 billion rupees in deposit accounts, a move it said weakened budget discipline and reduced oversight.

At the same time, the state’s verification drive has sharply reduced the number of beneficiaries. According to the BBC, more than 9 million women were removed after identity checks, while others were found ineligible. Livemint reported that the total fell by more than 9.2 million, or nearly 38 per cent of the original roll-out, after mandatory e-KYC checks and other verification steps. The removals are expected to cut the scheme’s annual cost by more than 165 billion rupees.

Officials have said some exclusions were straightforward: beneficiaries had exceeded income or age limits, belonged to households already covered by other welfare schemes or included government employees. The government has also acknowledged that some men and thousands of government staff had received payments, though it has not detailed how much money has been recovered. For economists, the episode underlines both the appeal and the strain of direct cash transfers. Neeraj Hatekar says the monthly payment matters greatly to women with irregular earnings, but argues that stronger public services would reduce the need for repeated handouts. Ajit Ranade, meanwhile, says governments must weigh immediate political gains against longer-term fiscal damage.

For Bawaskar, the argument is less abstract. She says the scheme has not lifted her family out of poverty, but it has given her independence she never had before. “It’s money of my own,” she said. “That’s what matters to me.”