Ladki effect: State to steer clear of sops
I have been watching the latest debates about targeted welfare promises — the so-called "ladki" schemes and other gender-focused sops — with a mixture of sympathy and caution. As someone who believes in practical, long-term welfare, I keep asking myself: do short-term freebies help the girl child, or do they create dependencies that hurt her future prospects?
Why the instinct to give is understandable
- Politicians and administrators see immediate political gains and measurable short-term relief in distributions: food, cash transfers, free electricity, or direct payments to mothers.
- Targeting girls and women is ethically right when it corrects historic imbalances. The instinct to make a visible, immediate difference is powerful and often sincere.
Yet good intentions are not enough.
The "ladki effect" I worry about
When the state leans on sops as a primary instrument, I notice three predictable and dangerous patterns:
- Fiscal strain becomes structural. A promise that looks affordable for one electoral cycle can become an irresistible entitlement — and a ballooning line item in state budgets.
- Perverse incentives emerge. If a subsidy reduces the incentive to work, or crowds out skill-building and employment programs, beneficiaries can become economically weaker over time.
- Policy attention narrows. Large doles pull administrative bandwidth away from health, education quality, and women’s skills training — interventions that deliver compounding returns.
I am not arguing against targeted support. I am arguing for surgical choices: pick interventions that unlock future earnings and agency, not those that merely transfer consumption.
What I recommend instead
- Prioritise skills and livelihood programs tied to measurable job outcomes over recurrent cash sops. A one-time investment in training can outlast multiple years of small cash transfers.
- Design time-bound transition plans. If a benefit is necessary, attach it to clear graduation criteria tied to employment, education, or business-creation milestones.
- Protect fiscal space with sunset clauses. Any large subsidy must come with a legally enforceable review and a phase-out plan if certain economic thresholds are crossed.
- Use pilots and evidence. Before scaling, run randomized or phased pilots that measure long-term outcomes: school retention, labour participation, asset creation.
My practical test before endorsing any scheme
When I evaluate a proposed legislative or executive sop aimed at girls/women, I ask four simple questions:
- Does it increase lifetime earnings potential (skills, education, assets)?
- Is it time-bound with clear graduation criteria?
- Can the state afford it without crowding out essential services?
- Is there a credible monitoring and evaluation plan to measure impact after 2–5 years?
If the answer to any of these is "no," I advise steering clear.
A short policy note
Recent editorials and commentaries have flagged the normalisation of freebies as a political tool — and the risk that it becomes the fiscal norm rather than the exception. For further reading on how freebies have been shaping electoral behaviour and state finances, see this editorial discussion on the broader trend Distributing freebies to win elections — The new normal and related commentary on state-level schemes and debates in the press.
Closing reflection
I respect the desire to do something now for girls who need support. But if our policy choices make girls dependent on the state for consumption rather than equipping them to stand on their own two feet, we have failed them. My plea to policymakers is simple: build programs that teach, equip, and graduate — not programs that only placate.
Regards,
Hemen Parekh
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