Kumar Ayush

A policy deconstruction of Unconditional Cash Transfers to Women (UCTW) submitted as Group B's Policy Deconstruction Assignment for the Post-Graduate Programme in Public Policy (PGP10) at The Takshashila Institution. The full brief can be downloaded here and the slide deck here.

The summary below is AI-generated from the submitted work.

Position: Strongly Oppose

Since Assam's Orunodoi launched in 2020, twelve Indian states have adopted recurring unconditional cash transfers to women, committing an estimated ₹ 1.7 lakh crore in FY 2025-26 budgeted expenditure. The brief evaluates these collectively as a single policy and opposes it on three grounds: there is no market failure to correct, the fiscal cost is large and self-reinforcing, and the administrative capacity to run the schemes as designed does not exist at the required scale.

Unconditional cash is not a merit good. There is no externality of meaningful size from health, education, or productivity gains that justifies government intervention. Absent a market failure, UCTW is better understood as government failure — a politically convenient instrument substituting for capital investment and structural reform in health, education, and employment access.

Fiscal and Administrative Outcomes

Six of the twelve implementing states run revenue deficits; the transfers are partly debt-financed. Transfer amounts have escalated from ₹ 833–1,000/month in early schemes to ₹ 3,000/month in West Bengal's successor scheme, with no evidence that outcomes are improving in proportion to cost. Maharashtra's verification drive offers the clearest available evidence of what happens when the design meets ordinary administrative capacity: 92 lakh beneficiaries — roughly 38% of the scheme's rolls — were removed as ineligible, having collectively received approximately ₹ 14,000 crore before payments stopped. The CAG separately flagged ₹ 3,541 crore in unauthorised excess expenditure in a single year. The problem is not disbursement capacity (Aadhaar, JAM, UPI are strong) but the verification layer — beneficiary identification, de-duplication, and monitoring — which is precisely where Indian state administration remains weak.

Welfare and Political-Economy Outcomes

The most consistently supported effect is short-term consumption smoothing. The longer chain of claimed benefits — durable bargaining power, labour-force participation, intergenerational human capital — rests on markedly weaker evidence. Several documented channels actively work against the empowerment narrative, including transfer capture by male household members and reduced incentive to remain in low-paid formal work. Politically, the schemes are a one-way ratchet: West Bengal's 2026 election saw parties contest only how much further to raise the transfer, not whether to retain it at all.

Recommendations

The brief's six recommendations are: do not expand to new states; freeze transfer amounts and tighten eligibility in existing schemes using verified income and asset checks; redirect freed fiscal space toward genuine merit goods — public health, girls' secondary education, vocational skilling, and childcare infrastructure; commission an independent pre-registered evaluation of at least two major schemes; legislate a sunset-and-review clause requiring explicit legislative re-authorisation on a fixed cycle; and mandate a standardised annual CAG-style audit published on a common template across all state schemes.

Thanks to Harshal Deokar, Sriya Misra, Ruben Sebastian, Priyanka Mehra, Diwakar Sathasiva Jeevan, and Syed Mohammad Hamza for working with me on this project.