Tsunami of the women centric DBT schemes can bleed state finances: SBI Report
SBI Warns: Women's Direct Benefit Schemes May Strain State Finances
The State Bank of India has raised concerns about the financial impact of women-centric Direct Benefit Transfer schemes announced by various states in India. These schemes, designed to provide direct cash transfers to women, have become popular, especially before elections. However, the SBI report warns that these initiatives could significantly affect state finances.
Financial Impact on States
The report highlights that the total cost of these schemes across eight states has exceeded Rs 1.5 lakh crore, representing 3-11% of these states' revenue receipts. While some states like Odisha can manage these costs due to higher non-tax revenues, others may face fiscal challenges.
Examples of State Schemes
| State | Scheme | Cost | Percentage of Revenue Receipts |
|---|---|---|---|
| Karnataka | Gruha Lakshmi | Rs 28,608 crore | 11% |
| West Bengal | Lakshmir Bhandar | Rs 14,400 crore | 6% |
| Delhi | Mukhyamantri Mahila Samman Yojana | Rs 2,000 crore | 3% |
Suggestions for Sustainable Alternatives
The report suggests that a universal income transfer scheme, with matching grants from the central government, could be a more sustainable alternative. This approach could also help reduce market-disrupting subsidies.
While these schemes aim to empower women and gain electoral support, the report advises states to consider their fiscal health and borrowing patterns before implementing such programs. A comprehensive view of welfare spending and its long-term impact on state finances is crucial.
Doubts Revealed
SBI
SBI stands for State Bank of India, which is one of the largest banks in India. It provides banking and financial services to people all over the country.
Direct Benefit Transfer
Direct Benefit Transfer (DBT) is a way the government sends money directly to people's bank accounts. It is used to provide financial help to people, like subsidies or welfare payments.
State Finances
State finances refer to the money that a state government has to spend on things like schools, roads, and hospitals. If a state spends too much, it might not have enough money for other important things.
Rs 1.5 lakh crore
Rs 1.5 lakh crore is a very large amount of money. In India, 'lakh' means 100,000 and 'crore' means 10 million, so Rs 1.5 lakh crore is 150,000 crore rupees.
Revenue Receipts
Revenue receipts are the money a government earns from taxes and other sources. It is used to pay for public services and development projects.
Fiscal Challenges
Fiscal challenges mean difficulties in managing money and budgets. If a state has fiscal challenges, it might struggle to pay for all the things it needs to do.
Universal Income Transfer Scheme
A universal income transfer scheme is a plan where the government gives a fixed amount of money to everyone, regardless of their income. It is meant to help people meet their basic needs.
Central Government Grants
Central government grants are funds given by the national government to state governments. These grants help states pay for projects and services they might not afford on their own.
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