Overview
- Aggregate spending on unconditional cash transfers is pegged at about ₹1.7 lakh crore in FY26, with many schemes targeting women.
- States running such programmes have grown more than fivefold since FY23, and roughly half of them are estimated to be in revenue deficit.
- State finances have weakened, with the combined gross fiscal deficit rising to 3.2% of GDP in FY25, revenue deficit at 0.7%, liabilities near 28.1% of GDP, and committed outlays consuming about 62% of revenue receipts.
- The Survey cautions that expanding open‑ended transfers can crowd out capital and human‑capital spending and can raise sovereign borrowing costs as markets price public debt on a consolidated basis.
- Citing global evidence, it finds UCTs boost consumption but do not reliably improve education or nutrition without complementary services, and it flags design gaps such as missing sunset clauses and periodic reviews.