Overview
- The Economic Advisory Council to the Prime Minister published a working paper on Monday that uses monthly bank account data from Maharashtra and Odisha to measure programme effects.
- The paper found large impacts on beneficiaries: Maharashtra’s monthly Rs 1,500 transfer raised month-end balances by about 84% and spending by about 46%, while Odisha’s Rs 10,000-a-year scheme raised balances by about 45% and spending by about 28%.
- Researchers estimate a high marginal propensity to consume, with beneficiaries spending roughly Rs 90 out of every Rs 100 received, signaling that transfers ease urgent liquidity and household needs.
- The study documents household spillovers that improved relatives’ account balances and reduced some relatives’ spending, and it reports faster uptake of digital payments, notably UPI in Maharashtra.
- Authors recommend sustaining and redesigning schemes into cash-plus programmes that add voluntary skills, digital literacy and self-help group links, but they note scaling or indexation will require trade-offs given PRS and RBI warnings about rising state debt.