17 Jul Why is Maharashtra’s Ladki Bahin Scheme under Scrutiny?

Why in News

The Mukhyamantri Majhi Ladki Bahin Yojana in Maharashtra has come under scrutiny following observations by the Comptroller and Auditor General (CAG) regarding financial management and budgetary practices. Moreover, the State government has removed a large number of beneficiaries after verification, leading to political debate over the scheme’s implementation.

Key Highlights

1. What is the Mukhyamantri Majhi Ladki Bahin Yojana?

The Maharashtra Government launched the Mukhyamantri Majhi Ladki Bahin Yojana ahead of the 2024 Assembly elections to provide financial assistance to eligible women.

Under the scheme:

• Eligible women receive ₹1,500 per month through Direct Benefit Transfer (DBT).
• The scheme aims to promote women’s economic independence.
• It also seeks to improve health, nutrition, and participation in household decision-making.
• The Women and Child Development Department implements the scheme.

Therefore, the scheme combines social welfare with financial inclusion.

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2. Who is Eligible?

To receive benefits, an applicant must:

• Be a resident of Maharashtra.
• Be 21–65 years of age.
• Have an Aadhaar-linked bank account.
• Belong to a family with an annual income below ₹2.5 lakh.
• Only one woman per family can receive benefits.
• Women of any marital status are eligible.

Thus, the scheme targets economically weaker households while avoiding duplication of benefits.

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3. Why has the CAG Raised Concerns?

The Comptroller and Auditor General (CAG) highlighted several deficiencies in the implementation of the scheme during 2024–25.

According to the audit:

• The scheme received a budget allocation of about ₹29,693 crore.
• However, the expenditure reached around ₹33,237 crore.
• This resulted in an excess expenditure of approximately ₹3,541 crore.

Furthermore, the CAG described the excess spending as unjustified, stating that the Women and Child Development Department did not provide adequate justification.

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4. What Financial Issues Did the CAG Identify?

The audit raised concerns regarding budgetary discipline.

Key observations include:

• Funds were reallocated from other government schemes to finance the programme.
• Significant amounts remained in the Drawing and Disbursing Officer’s Virtual Personal Deposit Account (VPDA) instead of being utilised immediately.
• Budget estimates and expenditure controls were not properly maintained.
• Financial management practices did not fully adhere to principles of fiscal discipline.

Consequently, the CAG questioned whether public funds were managed efficiently.

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5. Why Were Beneficiaries Removed?

At its peak, the scheme covered approximately 2.43 crore women.

However, after multiple rounds of verification, the number of beneficiaries declined to nearly 1.66 crore.

The State Government stated that:

• Verification identified beneficiaries who no longer met the eligibility criteria.
• Mandatory e-KYC verification removed duplicate and ineligible beneficiaries.
• The eligibility rules themselves were not changed.

On the other hand, opposition parties argued that several eligible women lost benefits because they could not complete the e-KYC process within the stipulated time.

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6. Why is the Issue Significant?

The controversy extends beyond beneficiary verification.

It raises broader governance issues, including:

• Transparency in welfare delivery.
• Accuracy of beneficiary databases.
• Fiscal responsibility in implementing large welfare schemes.
• Accountability in public expenditure.
• Balancing social welfare objectives with financial discipline.

Therefore, the scheme has become an important case study in public finance and welfare governance.

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7. What is the Broader Policy Significance?

Direct Benefit Transfer (DBT) schemes have become an important instrument for delivering welfare benefits across India.

However, their success depends on:

• Accurate identification of beneficiaries.
• Regular database verification.
• Strong financial management.
• Effective grievance redressal.
• Timely completion of e-KYC and Aadhaar authentication.

Ultimately, efficient implementation is as important as policy design for achieving welfare objectives.

Constitutional and Institutional Framework

• Article 148 – Establishes the Comptroller and Auditor General (CAG) of India.
• Article 149 – Defines the duties and powers of the CAG.
• Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 – Governs audit functions.
• Direct Benefit Transfer (DBT) – Ensures direct transfer of welfare benefits into beneficiaries’ bank accounts to improve transparency and reduce leakages.

UPSC Relevance

GS Paper II

• Welfare Schemes
• Vulnerable Sections
• Governance
• Direct Benefit Transfer (DBT)
• Accountability and Transparency

GS Paper III

• Public Finance
• Fiscal Management
• Budgetary Control
• Financial Accountability
• Social Sector Development

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Key Terms

Direct Benefit Transfer (DBT)

A mechanism through which government subsidies and welfare benefits are transferred directly into beneficiaries’ bank accounts, thereby reducing leakages and improving transparency.

e-KYC

Electronic Know Your Customer (e-KYC) is a digital verification process that authenticates the identity of beneficiaries using Aadhaar or other approved documents.

Comptroller and Auditor General (CAG)

The CAG is an independent constitutional authority responsible for auditing the receipts and expenditure of the Union and State Governments and ensuring accountability in public financial management.

Virtual Personal Deposit Account (VPDA)

A government account used for temporarily parking public funds before disbursement. Excessive or prolonged parking of funds may indicate weaknesses in financial management.

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Way Forward

To strengthen the effectiveness of welfare schemes, governments should:

• Improve beneficiary verification through periodic database updates.
• Complete e-KYC well before payment cycles.
• Strengthen financial planning and budget estimation.
• Ensure timely utilisation of allocated funds.
• Enhance transparency through regular public disclosure of beneficiary data and audit findings.
• Establish robust grievance redressal mechanisms for excluded beneficiaries.

Overall, welfare programmes must combine social inclusion with sound fiscal management to achieve sustainable outcomes.

UPSC Prelims Practice Question

Q. With reference to the Mukhyamantri Majhi Ladki Bahin Yojana and the role of the Comptroller and Auditor General (CAG), consider the following statements:

1. The Mukhyamantri Majhi Ladki Bahin Yojana provides financial assistance through the Direct Benefit Transfer (DBT) mechanism.
2. The Comptroller and Auditor General (CAG) is a constitutional authority established under Article 148 of the Constitution.
3. The CAG has the authority to approve the Budget of State Governments before it is presented in the Legislature.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (a)

Explanation

Statement 1: Correct.
The Mukhyamantri Majhi Ladki Bahin Yojana transfers ₹1,500 per month directly into eligible women’s bank accounts through the Direct Benefit Transfer (DBT) system. DBT aims to improve transparency and reduce leakages in welfare delivery.

Statement 2: Correct.
The Comptroller and Auditor General (CAG) is an independent constitutional authority established under Article 148 of the Constitution of India. It audits the accounts of the Union and State Governments and promotes accountability in public financial management.

Statement 3: Incorrect.
The CAG does not approve the Union or State Budgets. Budget preparation and presentation are executive functions carried out by the respective governments. The CAG’s role is to audit expenditure and receipts after implementation and report its findings to the Legislature.