India’s states are discovering an uncomfortable truth: economic growth and economic security are not the same thing. For much of the past decade, India has been celebrated as one of the world’s fastest-growing major economies. Yet, across the country, governments are increasingly finding it necessary to transfer cash directly into the bank accounts of women, farmers and unemployed youth. What began as targeted welfare has evolved into a defining feature of public policy. The trend says as much about the strengths of India’s welfare architecture as it does about the weaknesses of its labour market. The expansion of direct benefit transfers has undoubtedly brought benefits.

For poor households grappling with inflation, crop failures, uncertain employment and rising living costs, even modest monthly assistance can mean the difference between stability and distress. The ability of governments to deliver funds directly through bank accounts has reduced leakages and strengthened the social safety net. In a country where economic shocks often push vulnerable families into debt traps, such support cannot be dismissed........

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