18 States to Spend ₹1 Lakh Crore on Schemes Like Ladli Behen Yojana
18 states across India, including Madhya Pradesh, will spend ₹1 lakh crore on welfare schemes like the Ladli Behen Yojana. This claim is made in a report by Crisil. According to the report, the total expenditure on social sector schemes could be 2% of the GDP of the states. This could lead to difficulties in getting funding for state development works, which will directly impact capital expenditure.
The analysis presented by Crisil shows that these 18 states, including Madhya Pradesh, account for 90% of the total GDP of the country. Senior Director at Crisil Ratings, Anuj Sethi, states that social welfare spending is expected to increase by around ₹2.3 lakh crore in the financial years 2025 and 2026 compared to the fiscal year 2024. Out of this, ₹1 lakh crore will be provided as Direct Benefit Transfers (DBT) to women, as part of electoral promises, while the remaining ₹1.3 lakh crore will be used to provide financial and medical aid to underprivileged sections and social security pensions.
In recent years, several states have held legislative elections, where announcements of freebie schemes like cash transfers, such as the Ladli Behen Yojana, have been made. This has led to an increase in DBT allocations. Looking ahead to future elections, there is a likelihood of an increase in cash transfer schemes, which will become a key area of monitoring.
The analysis includes states such as Maharashtra, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh, Telangana, Rajasthan, West Bengal, Madhya Pradesh, Andhra Pradesh, Kerala, Odisha, Jharkhand, Haryana, Punjab, Bihar, Chhattisgarh, and Goa. These states will collectively spend ₹1 lakh crore on schemes like Ladli Behen Yojana this year.
Crisil’s Director, Aditya Jhanwar, states that an increase in revenue deficit leads to a reduction in capital expenditure by states. While capital expenditure increased by just 6% in FY 2024-25 due to a rise in revenue deficit, it negatively impacts the economy, as capital expenditure is critical for boosting investment in states.