Reality check: The financial fallout of Ladki Bahin Yojana in Maharashtra

Maharashtra Chief Minister Devendra Fadnavis

The phrase “there is no such thing as a free lunch” resonates with the present state of financial affairs in Maharashtra—literally.

Although the Ladki Bahin Yojana proved to be a game-changer during the Maharashtra Vidhan Sabha polls and played a key role in the return of Mahayuti to power, its financial consequences are now making their presence felt. The fears expressed by financial experts regarding the populist scheme are turning out to be true. Other welfare programmes have been impacted by the scheme, which was primarily launched to woo women voters.

It has been reported that the government is contemplating discontinuing the “Shiv Bhojan Thali” programme, which was initiated during Uddhav Thackeray’s chief ministership to feed the poor. The beneficiaries of the scheme were given a full meal consisting of dal, rice, vegetables, and chapatis at a subsidised price.

The issue was discussed in the cabinet meeting last Tuesday, and a decision to discontinue the scheme could be taken after the upcoming budget session. Similarly, another scheme named “Anandacha Sidha” is also under the scanner. Under this scheme, food kits consisting of festive delicacies were given to the poor at Rs 100 on occasions like Diwali, Ganesh Chaturthi, Ambedkar Jayanti, and the consecration ceremony of the Ram temple in Ayodhya. The Maharashtra government has spent Rs 13,000 crore on both schemes.

Recently, the state also discontinued the distribution of eggs to students of government schools under the Mid-Day Meal Scheme. The state had allotted Rs 50 crore for the scheme, but now schools have been asked to seek public sponsorship for distributing eggs. The scheme was introduced in November 2023 to address the issue of protein deficiency in students.

The non-clearance of dues to state government contractors is another instance that reflects adversely on the financial health of Maharashtra. A number of contractors and their employees declared an indefinite strike last Wednesday over the non-payment of dues amounting to Rs 90,000 crore by various government departments. Writing to the Chief Minister and the Deputy CM, the workers had demanded the clearance of dues by January 31. After receiving no relief, they held demonstrations outside government offices.

Maharashtra’s fiscal deficit is likely to cross Rs 2 lakh crore this year, compelling the government to rethink its expenditure and reconsider the continuation of populist schemes. The financial burden on state coffers increased last year after the implementation of the Mukhyamantri Majhi Ladki Bahin Yojana.

The state government earmarked Rs 46,000 crore for the scheme, with an additional Rs 14,000 crore allocated last December. As per the scheme, financial assistance of Rs 1,500 is provided to women belonging to economically weaker sections, aged 21 to 65. Before the elections, the Mahayuti alliance promised to raise the monthly amount to Rs 2,100, which now seems challenging considering the dismal state of Maharashtra's economy.

The scheme was initiated on the lines of Madhya Pradesh’s Laadli Bahan Yojana by the BJP government. Observing the electoral benefits of the scheme, it was launched in Maharashtra as well. The state government has now tasked district officials with detecting cases where non-eligible women are receiving benefits under the scheme.