E-Paper
Financing women-led development cannot depend only on UCTs
This article is authored by Sona Mitra, visiting researcher, SCIS, Wits University, South Africa.
At a time when global financing for gender equality is increasingly constrained, India commits to women-led development (WLD) as a central pillar of its vision for Viksit Bharat 2047.
The concept recognizss women as active leaders and drivers of economic and social transformation. It is rooted in the understanding that sustainable growth is not gender-neutral; it is accelerated when women participate meaningfully in labour markets, entrepreneurship, governance, and decision-making. By strengthening women’s agency, expanding economic opportunities, and enabling institutional participation, women-led development posits gender equality not merely as a social goal, but as a macroeconomic imperative with adequate financial backing.
In the last few years, while conversations on WLD have gained momentum, the intent on financing the agenda has not been commensurate. While this year the gender-responsive allocations crossed 9% of total Union expenditure 2026-27 amounting to over ₹5 lakh crore, exceeding 1% of GDP — a first in two decades of institutionalised gender budgeting - an examination of the Gender Budget (GB)) statement reveals important structural imbalances.
About 22% of the GB is allocated to schemes exclusively targeted at women (reported by 10 ministries). The bulk—over 75%—comes from programmes across 27 ministries where women constitute between 30% and 99% of beneficiaries. Meanwhile, a small but notable 6% is reported by 37 ministries where less than 30% of allocations directly reach women. More significantly, nearly 85% of the total GB is concentrated within a handful of large ministries—rural development, food and public distribution, jal shakti, health and family welfare, women and child development, and agriculture—amounting to roughly ₹4.2 lakh crore. The remaining 50 ministries together account for just 15% of the allocations.
This concentration suggests that while headline figures are robust, investments in several critical areas—such as women’s employment, skilling, safety, access to justice, and gender-responsive infrastructure—remain relatively underwhelming. These are precisely the sectors that can enable structural transformation in women’s lives, moving beyond welfare to empowerment.
This pattern of central spending must also be situated within a broader shift in India’s fiscal federalism. Over the past decade, there has been a gradual rebalancing of public expenditure, with states assuming a larger role in financing and delivering welfare and social sector services. This shift has been driven by multiple factors: fiscal consolidation pressures at the Union level, arrangements of cost-sharing in centrally sponsored schemes, and successive Finance Commission recommendations that have increased states’ share in divisible tax revenues.
As a result, states now account for the bulk of spending on health, education, nutrition, social protection, and welfare—including a growing reliance on direct benefit transfers (DBTs) and unconditional cash transfers (UCTs). According to the RBI’s State Finances Report 2025–26, states’ social sector expenditure has increased from around 6% of GDP in 2010–11 to 8.2% in 2025–26. Within this, spending on social security and welfare (covering women, children, the elderly, and persons with disabilities) has risen from 9.5% to 14.3% as a share of total social sector expenditure.
Yet, this expansion has been accompanied by a shift in composition. The same report points to declining shares of expenditure on education (down by nearly 10 percentage points), and modest reductions in health, nutrition, and family welfare. Pension expenditures have also seen a slight decline suggesting a reprioritisation within state budgets and increasing share of cash transfers.
The 16th Finance Commission’s analysis reinforces this shift. It distinguishes between traditional social sector spending and categorises it as “large-group transfers.” The share of traditional social security spending in total transfers has declined from over 60% to 38% in the last five years, while large-group cash transfers have increased sharply—from 16% to nearly 50%. Cash transfers, in other words, are no longer marginal instruments--they are central to state-level welfare strategies.
A significant proportion of these transfers are targeted at women. Over the past five years, the number of unconditional cash transfer schemes directed at women has expanded rapidly—from just one major scheme in 2020 to around 15 by 2025. Correspondingly, annual outlays have surged from approximately ₹1,600 crore to ₹2.5 lakh crore. In several states—including Telangana, Jharkhand, Bihar, and Maharashtra—such schemes now account for between 0.1% and 3% of Gross State Domestic Product.
These programmes are often justified as cash in hand enhance women’s control over household resources, improve intra-household bargaining power, and provide immediate income security. Ground level evidence suggests that this cash has indeed prioritised household spending on food, healthcare, children’s education, utilities, and clean cooking fuels—indicating clear welfare gains.
However, the critical question remains: Are UCTs sufficient to finance WLD? Clearly not on their own. While UCTs can alleviate short-term income vulnerabilities and provide a degree of financial autonomy, they do not address the structural gender inequalities. Women’s economic empowerment depends on access to decent and stable employment, ownership of productive assets, safe mobility, affordable care infrastructure, and the ability to participate in public and economic life. Cash transfers, by design, neither create jobs nor build infrastructure or dismantle discriminatory norms.
There is also a risk that an over-reliance on UCTs may inadvertently narrow the policy imagination. When framed primarily as welfare support for women as caregivers, such transfers can reinforce traditional gender roles rather than challenge them. In doing so, they risk keeping women as labharthis (beneficiaries), rather than enabling their transformation into drivers of economic development. This runs counter to the very premise of women-led development.
Moreover, the growing fiscal prominence of UCTs raises concerns about states’ fiscal pressures. As states allocate increasing resources toward cash transfers, there is a possibility—already visible in expenditure trends—that investments in critical public goods such as education, health systems, skilling ecosystems, and care infrastructure may be relatively deprioritised. This could undermine long-term gains achieved through gender responsive budgeting in closing the gender gaps on several counts.
Financing WLD, therefore, requires an aggressive and strategic approach. UCTs should be seen as one amongst several instruments within a broader gender responsive policy framework—not as a substitute for public investment. A transformative fiscal strategy may integrate cash transfers but surely prioritise and improve investments in critical components for achieving gender equality outcomes and enable women to participate fully in India’s development story.
This article is authored by Sona Mitra, visiting researcher, SCIS, Wits University, South Africa.
