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Indian democracy is undergoing a subtle yet profound transformation. For decades, the familiar narrative was one of anti-incumbency — voters routinely ousting governments perceived to have faltered. But in recent years, that story has been changing. Across a number of large states — from West Bengal to Madhya Pradesh, from Uttar Pradesh to Bihar — regimes once thought vulnerable have instead returned with stronger mandates. The shift is not simply one of charisma, identity or campaign strategy. It is being shaped by a new political-economic logic: the rise of direct benefit transfers (DBTs) to women, the turning of consumption demand into welfare flows, and the pressing absence of quality jobs. In short, where the economy has failed to deliver broadly, the state has responded with cash, and voters — especially women — are responding in kind.

Consumption, Cash and the Welfare Turn

Over the last decade, household consumption in India — which accounts for roughly 55–60 % of GDP — has faced multiple shocks. The 2016 demonetisation, the rollout of the goods & services tax (GST) in 2017, the Covid-19 pandemic and the slow recovery that followed combined to suppress spending, particularly in rural and informal sectors. In rural markets, volumes of fast-moving consumer goods (FMCG) grew by only about 8.4 % in the March 2025 quarter — still ahead of urban growth at 2.6 % — but the gap between expectation and reality has widened. (Reuters)
Amid this consumption squeeze, the state’s instrument of choice has increasingly become the DBT. According to public data, by April 2020 nearly 19.86 crore women beneficiary accounts had been credited with about ₹9,930 crore under specified schemes. (Press Information Bureau)
In broader terms, over multiple states and women-targeted schemes, the cumulative amount transferred via DBTs has crossed the ₹2 trillion (₹2 lakh crore) mark. (VISION IAS)
This movement matters for two key reasons: one, because it represents a large-scale infusion of liquidity into households that were previously under-banked and under-empowered; and two, because it fundamentally alters the political contract between state and citizen. For many women recipients, this is not just an income supplement—it is a recognition of financial agency.

Women at the Forefront

The political significance of women as recipients of DBTs cannot be overstated. Female labour force participation in India has shown noteworthy increases. A recent analysis from the Centre for Employment Studies and Development (CEDA) finds that since 2017-18, overall labour force participation rose from 51.5 % to 60.5 % in 2023-24, and this rise was primarily driven by women. In rural India, the female LFPR jumped from about 23.5 % to 42.8 %. (CEDA »)
But this rise in numbers masks a deeper dynamic: women are largely still doing informal, precarious work, so the political breakthrough lies less in formal employment than in direct receipt of state transfers. Research shows that conditional and unconditional cash transfers to women are reshaping their economic agency, improving household well-being, and influencing voter behaviour. (ORF Online)
In other words, when a rural woman receives a monthly credit, she becomes part of the welfare ecosystem—and massively more visible in electoral politics.

State-Level Narratives: Welfare as Political Shield

West Bengal

In West Bengal, the rural economy has faced deep structural constraints — low industrial growth, under-employment, dwindling agricultural returns. Amid this vulnerability, schemes such as Lakhir Bhandar and Khadya Sathi served as stabilisers. The monthly transfers for women and subsidised food grains diminished acute insecurity. Women’s own financial capacity improved, which had the dual effect of stabilising household consumption and rewriting political loyalties. The ruling party thus converted economic stagnation into electoral resilience.

Madhya Pradesh

In Madhya Pradesh, agrarian distress is endemic: erratic rainfall, rising input costs, weak market linkages, partisan land use. The state responded with schemes like Ladli Behna and the Kisan Kalyan Yojana. These provided direct support to rural women and farming households, offering liquidity when no alternative income streams were robust. Politically, these transfers created a new constituency of women who felt both acknowledged and protected—crucial in a state where anti-incumbency often rides on rural discontent.

Uttar Pradesh

UP’s story is shaped by its rural–urban duality. Urban centres leap ahead, while large swathes of hinterland remain stagnated. Youth unemployment is high, informal work dominates, and women’s employment continues to be insecure. The state’s women-oriented DBTs acted as compensatory measures. They did not replace the missing jobs or the lack of industrial diversification, but they offered a floor beneath which many households did not fall. Politically, they became bulwarks of loyalty.

Maharashtra & Jharkhand (2024 Episodes)

The electoral turnarounds in Maharashtra and Jharkhand in 2024 provide another layer of insight. After the May 2024 national elections, both states signalled anti-incumbency. However, within months, welfare interventions targeted at women — in Maharashtra through the “Ladki Bahin” scheme, in Jharkhand via “Maiya Samman” — were launched. Soon afterwards, both ruling alliances secured decisive victories in their respective assembly polls. The timing of the transfers, the focus on women, and the swift electoral bounce point to a refined welfare-politics formula at work.

Bihar: The Defining Moment

No single state demonstrates the new welfare-politics logic better than Bihar in its 2025 assembly elections. Bihar’s economic profile is well-known: one of the lowest per-capita incomes in India, large dependence on remittances, under-employed rural workforce, and weak industrial base. A cash transfer can therefore do far more transformative work here than in relatively prosperous states.

Under the Mahila Rozgar Yojana, about 75 lakh women in Bihar received one-time payments of ₹10,000 each. This represented significant income for many households — often equal to two months’ earnings. The effect was both immediate and visible: women’s turnout rates increased, electoral volatility reduced, and the ruling coalition achieved a remarkable victory, securing over 200 of 243 seats.
In this instance, the combination of deep economic insecurity + large women-targeted transfer + visible rollback of opposition momentum produced a textbook case of a DBT-driven electoral tilt. It underlines the emerging political formula: welfare-first → women-beneficiaries → pro-incumbency.

Moreover the name of the scheme has a greater sociological impact. Women in Bihar are typically not allowed to migrate for jobs to other states. Given the lack of jobs in Bihar, it is this segment which ends up working in household activities with no  recognition of that as employable work. Now the name of the scheme with “ROJGAR” brings a sociological acceptance to their work in household  with government recognition.

The New Pro-Incumbency

Traditionally, incumbents faced structural disadvantages; India was long characterised by high rates of government turnover. But the last decade suggests a different pattern emerges when welfare delivery takes a front seat. States where the ruling party succeeds in establishing a reliable, visible transfer mechanism — especially to women — increasingly convert voter gratitude into electoral returns.

These states tend to share three features: strong administrative delivery of DBTs; large female beneficiary bases; and economic distress (i.e., where jobs and incomes are weak). In such contexts, the political calculations shift: voters may still desire jobs and growth, but their immediate decision criterion becomes “Will I receive dependable support?” rather than “Will there be transformational growth?”.

In effect, pro-incumbency is now conditioned on welfare credibility rather than purely performance or aspirations of growth.

Structural Drivers: Inequality, Jobs and the Political Demand for Welfare

Why has DBT become such a central pillar of electoral politics in India today? Two structural factors stand out.

First, inequality has surged. According to recent global data, the top one percent of Indians command over 20 % of national income and upwards of 40 % of wealth — among the highest levels in decades. For the bottom half of households, real wage growth has stagnated, informal employment dominates, and vulnerability to shocks remains high. In such an economy, even modest cash transfers represent meaningful financial relief.

Second, the employment landscape is under strain. Though India’s GDP continues to grow, job creation—especially in formal manufacturing and services—is falling short. The labour force survey for 2021-22 recorded female labour force participation at about 32.8 % (up from 23.3 % in 2017-18). In rural areas, the increase was more dramatic: from 24.6 % to 36.6 % over the same period. (Directorate General of Employment) But much of this increase is self-employment, unpaid work or casual labour. The big issue remains the lack of quality, regular jobs.

The overall trust in the employment system has reduced significantly. The lack of quality jobs, lesser government vacancies and uncertainty in jobs is adding to this. All of this is leading to distrust in the belief that one will be able to secure a job. This is leading to more trust in DBT specially for women who are mainly running the household.

Given these realities, DBTs become a politically robust mechanism: they are visible, frequent, targeted and emotionally resonant. They allow households—especially women—to feel a direct connection with the state. That connection often trumps the uncertainties of futures promised but not delivered.

Governance, Reform and the Welfare Trade-Off

However, the rise of welfare-centric politics also raises important governance questions. Heavy reliance on cash transfers burdens state finances, often at the expense of infrastructure, education, health, and industrial policy. Regular, predictable transfers may unintentionally become a substitute for deep reforms—rather than a stepping-stone.

In states where DBTs form the electoral backbone, the incentive to initiate difficult structural change (for example, manufacturing investment, agricultural market reform, or job-intensive public works) may diminish. Welfare becomes the safe path; reform becomes the risky path.

Still, recognising DBTs as a foundation rather than the end may offer a way forward. A balanced approach would treat cash transfers as a floor, upon which employment generation, skill development, infrastructure investment and inclusive growth can build. By doing so, the state can provide immediate relief while also repositioning households towards future opportunity, not just survival.

Conclusion: A New Social Contract in the Making

India is entering a new chapter in its democratic and economic evolution. The traditional bargain—growth plus opportunities plus votes—is being recalibrated. Now, the bargain increasingly looks like: welfare first, acknowledgement second, transformation later. Women, once peripheral in electoral economics, are now central. Cash transfers, once considered minor welfare interventions, are now structural components of political strategy. And in the absence of widespread job creation and income mobility, households are choosing certainty of support over promise of opportunity.

Whether this transformation strengthens Indian democracy or weakens its reform impulse depends on what governments choose to do next. If welfare becomes the ceiling, the cycle of dependency deepens; if welfare becomes the launchpad, then the next phase of Indian development is possible. DBTs are not the endgame. They are the signal of a changed social contract—and how that contract evolves will shape India’s politics, economy and society for decades.

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