In 1950, China banned arranged marriages. 

The move was part of several announcements that year, which completely changed Chinese society and culture. The government banned marriages arranged by parents and senior family members, saying that young people must freely choose who they wed. It also pushed policies for female education and mass employment, even requiring women to take up physically demanding jobs in construction and factories. 

The government advertised these changes heavily across urban and rural China, with slogans telling women to behave like "Iron Girls". Female participation in the workforce zoomed, and female employment went from around 30% of working-age women in 1950 to nearly 90% by the 1970s. 

Indian governments made no comparable effort. India has a female labour participation rate of 35% nationally and 25% in urban India today. Women here still mostly do unpaid, domestic work.

The Indian solution: freebies and cash transfers to women

What does a country do when the vast majority of its women don't work? You would think that the government would fix the barriers that keep women out of the workforce, focusing on education, job creation and safety in public spaces. 

But instead of pushing women to take up jobs, Indian governments, especially at the state level, are turning to unconditional cash transfers. 

At the central level, the main cash transfer scheme for women is the maternity benefit scheme (PMMVY), which provides conditional cash transfers to pregnant women and mothers. The government has cumulatively disbursed over Rs 20,100 crore to 4.3 crore women through this program. 

Cash transfers are a small amount in the central government's broader Gender Budget. It is the cash giveaway trend among Indian states that is far more worrying. 

States go all in on cash transfers to win votes from women

In 2020, the idea of cash transfers targeting women was a novelty in our politics. Just one state, Assam, ran such a program. Spending nationally on transfers was miniscule, at Rs. 1,600 crore. 

Over the next five years, cash transfer programs ballooned. It started with Mamata Banerjee. In the April 2021 West Bengal elections, Banerjee was in a fight for her political life. To boost her party's chances of winning, she promised women voters the Lakshmir Bhandar ('Lakshmi's Treasure Chest') scheme that would give Rs. 500 per month to women and Rs. 1000 per month to Dalit women aged 25-60.

The Trinamool Congress won in a landslide. In November that same year, Arvind Kejriwal copied the strategy. During a rally in Punjab, he made a massive promise ahead of the 2022 elections, of Rs 1,000 per month unconditionally to every woman in Punjab above the age of 18 if the Aam Aadmi Party (AAP) came to power. 

Both these politicians framed these cash transfers as part of a family relationship. Mamata Banerjee called herself 'didi' (elder sister) who understood the difficulties of running the household. Arvind Kejriwal similarly called himself the 'elder brother' of women voters in Punjab, saying, "Many mothers cannot buy basic things because of tight family budgets. This elder brother of yours will help you."

By the time the BJP won the West Bengal election in 2026, it had raised the cash transfer promise to Rs. 3000 per woman, and renamed from Lakshmir Bhandar to Annapurna. No party suggested that the program should end.

The number of states implementing mostly unconditional cash transfers to women has since grown to 15 across India, and the total amount has jumped 100 times since 2020. India's latest Economic Survey estimates that states will spend an astonishing Rs 1.7 lakh crore on cash promises annually. Some independent estimates put the number even higher, at Rs 2.5 lakh crore distributed to around 13 crore women. 

The cash transfer scheme in Karnataka now represents almost 30% of the state's total welfare and nutrition budget, at Rs. 26,000 crore. In West Bengal, the outlay has jumped from Rs. 8,000 crore in 2021 to Rs. 30,000 crore.

The result? Cash transfers are crowding out other spending.

Cash transfers are negatively impacting other spending by governments

Indian lawmakers often defend cash transfers, saying that they are a way to bypass family power structures, where men control the purse strings.  

But these transfers have become the rope Indian states are tying their own hands with. The increasing outlay is hurting the ability of the state to spend on other items. Across the 15 Indian states doing these transfers, these now eat up 3-11% of state revenues, according to SBI Research. On average, they consume more of state GDP than spending on infrastructure, education and health. 

While such free money provides women with immediate financial relief, they do not address long term issues they face. In fact, by not investing in public infrastructure and education, governments are narrowing opportunities for both women and men to find jobs and earn better incomes.  

The result? The average income of a woman in India is significantly lower compared to the average income of a man. And Indian women are much worse off than Chinese women, where policies pushed women to work. 

As the economist Arvind Subramanian notes, "Freebies are...symptoms of a problem, the problem being that the Indian state has not been very good at providing health, education and employment." What state governments are offering women right now, are distractions rather than solutions.