MUMBAI, INDIA – Ruhi Khan, a resident of Mumbai’s Santacruz area, lives with her family in a single room and shares a communal bathroom with numerous othre households. Her rent amounts to 8,000 Indian rupees (approximately US$93) per month.

Last year, the Bharatiya Janata Party (BJP), led by Prime Minister Narendra Modi, pledged a monthly allowance of 1,500 rupees (about US$18) to women in Maharashtra with annual household incomes below 250,000 rupees (US$2,929), contingent upon their support for the party.

Ruhi Khan met the criteria,as a stay-at-home mother whose husband earns 15,000 rupees (US$176) monthly as a driver. Consequently,she voted for the BJP.

“The extra money,” she says, “is very valuable to us.”

However, the payments ceased unexpectedly in December, leaving Ruhi Khan perplexed.

mehjabeen Rizvi, a social worker with two decades of experience assisting vulnerable women in Mumbai, notes that, “thay announce these programs in a hurry and then withdraw them whenever there is a stress on the budget.”

The Fiscal Reality of Maharashtra

Maharashtra faces a considerable debt of 9.3 trillion rupees (US$109 billion), marking a historic deficit. State finance minister Ajit Pawar has forecasted a revenue shortfall of 459 million rupees (US$5.4 million) for 2025-26, leading to a 100 billion rupee reduction in the cash-transfer program. economists suggest that the state’s financial challenges extend beyond these cash transfers,impacting the broader budget.

“The extra money…is very valuable to us.”

The Economics of Direct Cash Transfers

Since 2020,Indian politicians have increasingly promised direct cash payments to low-income women in exchange for votes. These programs propose continuous monthly transfers from state funds directly to recipients’ accounts if the candidate’s party wins.

While the financial outlay for these initiatives is considerable,experts argue it represents a fraction of overall government spending.

jayati Ghosh, an economics professor at the University of Massachusetts, Amherst, argues, “if we contrast the subsidy being given to big corporates and the paltry amounts being transferred to these women, it is clear that the former outweighs the latter.”

Such as,in 2019,the Indian government lowered tax rates for high-revenue companies,resulting in an estimated 1 trillion rupee revenue loss in 2020-21. Finance Minister Niramala Sitharaman justified the tax cut as a measure to stimulate investment and job creation.

Furthermore, the government subsidizes essential services for all citizens, irrespective of income. A 2024 report indicates that Bengaluru residents with state water connections pay only a fraction of the actual cost. similarly, states like Punjab, Delhi, and Karnataka provide free electricity up to a certain limit to all households, benefiting even those who can afford to pay.

Ritu Dewan, a Mumbai-based economist and vice president of the Indian society of Labor Economics, asserts, “There is no question of whether the state can afford this. They surely can. They just need to readjust their priorities and give benefits to those who need it the most.”

Program Sustainability and Political Implications

Government officials attributed the payment delays to beneficiary verification processes. Aditi Tatkare, minister for women and child development, stated in January that some ineligible women had received benefits. By March 2025, Ruhi Khan received her outstanding payments after the vetting was completed.

The resumption of payments brought relief to both Ruhi Khan and the politicians who had pledged the funds. The popularity of these transfer programs makes them politically sensitive, as any attempt to discontinue them could provoke strong opposition from the now-established voting bloc.

According to Mehjabeen Rizvi, “They come together as women and are not divided on the basis of caste or other identities.”

Ruhi Khan now participates in regular women’s meetings,discussing issues such as inflation and political accountability. She remains cautious, carefully managing her finances.

“In case the money stops reaching my account in the future, I want to be prepared,” she says.

Amidst ongoing budget cuts, Ruhi Khan worries about the potential disappearance of the transfers she depends on.

“Being poor is not easy,” she says. “Soak in the benefits while they last.”