In May 1795, English magistrates met at the Pelican Inn in Speenhamland, Berkshire. With food prices rising and the French Revolution unsettling the English establishment, they decided to top up agricultural wages from parish funds, linking payouts to bread prices and family size. Hungarian economic historian Karl Polanyi later saw this as an early assertion of a human “right to live” against the harshness of the market.
Critics, however, held a different view. Once wage support, relief for the poor, and public finance were folded into one instrument, it became unclear what the system was protecting: poor families, the wage structure, employers, or social peace. By subsidising wages from public funds, the Speenhamland system blurred price signals and weakened incentives. While relief could be justified, the instrument still had to be judged by its effects. India’s dole politics must now face the same test.
Cash support can indeed be essential in a poor, informal economy. The Economic Survey 2025-26 notes that transfers to women amount to 11-24% of the monthly income of women daily-wage workers, and 11-87% of self-employed women. But a transfer that begins as relief can also become a permanent fiscal commitment unless there is a clear account of who receives it, what it changes, and what it displaces.
These concerns assume importance because dole politics is now a regular feature of Indian statecraft. It appears as free electricity, free bus travel, monthly cash transfers, subsidised food, and utility subsidies.
PRS Legislative Research estimates that unconditional cash transfers to women alone rose from two States in 2022-23 to 12 states in 2025-26, with an estimated annual cost of ₹1.68 lakh crore (about 0.5% of GDP). For example, West Bengal has moved from Lakshmir Bhandar to Annapurna Yojana, budgeting ₹36,000 crore for a ₹3,000 monthly transfer to about 1.3 crore women. Tamil Nadu allocated ₹14,412 crore for the Kalaignar Magalir Urimai Thogai in its 2026–27 interim budget, and Assam set aside ₹5,000 crore for Orunodoi. Such schemes stake major claims on State finances.
Need for accountability
Cash may improve welfare, but it should not become a substitute for the public goods that make welfare durable. The same woman who values ₹1,500-₹3,000 may also need a functioning health centre, childcare, a good government school, or access to better work. A cash transfer may soften the strain created by weak institutions, but it cannot, by itself, address them.
Governments often attach lofty social purposes such as dignity and empowerment to these transfers, but rarely publish the model that links payments to outcomes. Who exactly is being targeted? What baseline data justifies the scheme? What effect is anticipated on consumption, debt, nutrition, schooling, health spending, labour supply, or women’s bargaining power? Without such answers, it is unsurprising that much of India’s dole politics today is defended by the moral language of welfare rather than evidence. An ADB study, prepared for the 16th Finance Commission, found that India lacks a systematic dataset of government expenditure on cash-transfer schemes.
Other democracies also redistribute and are not immune to welfare politics. However, benefits such as unemployment insurance, food support, and healthcare subsidies are usually tied to eligibility rules, contribution records, job-search obligations, or periodic reassessment. India need not copy these systems mechanically. Some transfers, especially to women in poor households, may be better left unconditional. But the fewer the conditions placed, the greater must be the obligation on governments to provide evidence.
A large recurring transfer should therefore include a welfare impact statement before rollout, detailing the objective, eligibility rule, expected coverage, five-year fiscal cost, alternatives considered, likely leakage and exclusion errors, and measurable outcomes. After rollout, household surveys should record not only whether the transfer was received but also how it affected consumption, debt, health spending, schooling, mobility, work incentives, control over household expenditure, and subjective well-being. Anonymised microdata should then be made available for independent research. Schemes that spend public money on this scale must survive severe scrutiny.
The case for evidence is also one of democratic fairness. Evidence will not remove politics from welfare, but it could make that politics more honest.
Sayantan Kundu is Assistant Professor of Finance at IMI Kolkata. Amarendu Nandy is Associate Professor of Economics & Public Policy at IIM Ranchi. Views are personal
Published – September 14, 2026 12:56 am IST
