The study found that about 41 percent of each rupee transferred was spent on food. Transfers also shifted household resources in favour of women. In the control group, lactating mothers consumed 17 percent fewer calories than other adults, far below clinical recommendations. Transfers helped close this gap.
Published Aug 28, 2025 | 8:00 AM ⚊ Updated Aug 28, 2025 | 8:00 AM
Where the programme made the clearest impact was in functional development.
Synopsis: Cash transfers to mothers in Jharkhand significantly increased food consumption, dietary diversity, and nutrient intake for women and children, according to a new study by the US-based National Bureau of Economic Research. About 41 percent of each rupee transferred was spent on food, indicating that cash transfers had a similar impact on food consumption as in-kind transfers such as the Public Distribution System.
Unconditional cash transfers to mothers significantly increase food consumption, dietary diversity and nutrient intake for women and children, according to a new working paper by the US-based private nonprofit research organisation The National Bureau of Economic Research (NBER), based on a large-scale study in Jharkhand.
The study found that cash transfers narrowed intra-household gender gaps and led to measurable gains in children’s functional development. However, improvements in children’s physical growth, measured by standard anthropometric indicators, were not observed on average. Sanitation conditions appeared to play a key role in limiting these gains.
Since 2018, India has rapidly expanded direct transfers to women, now covering about 134 million beneficiaries at a budgetary cost of over 0.6 percent of GDP – second only to food subsidies and ahead of MGNREGA in fiscal size. While much of this expansion has been politically driven, evidence on its impact on the ground has been limited.
The authors stress that the policy debate should move beyond “cash versus kind.” The paper shows that poor households do increase both the quantity and quality of food when cash transfers are directed to mothers.
The research involved a randomised evaluation across 480 anganwadi centres (AWCs) in eight districts, with 2,400 pregnant women registered through the Integrated Child Development Services (ICDS) system. Half the AWCs were randomly selected for treatment.
Mothers at these centres received ₹500 every month from their child’s birth until the child turned two: a total transfer of ₹12,000, roughly 10 percent of average household consumption. The transfers were deposited in women’s bank accounts and were unconditional, although labelled as support for nutritious food.
Researchers collected detailed data, including precise ingredient-level food consumption, health service use, and child development outcomes measured at ages one and three.
India now spends ₹2 trillion/year (0.6% of GDP) on cash transfers to 130M+ women—yet we know little about their effects. In a new paper (https://t.co/vbLgba0Wm0), we present findings from the first large-scale RCT of maternal cash transfers in India. Key results in🧵(1/10) pic.twitter.com/9HQf2pzwsd
— Karthik Muralidharan (@karthik_econ) August 27, 2025
Over two years, households receiving the transfers recorded an 11 percent rise in food expenditure. Mothers increased their calorie intake by 141 calories in the first year and 271 calories in the second.
Children’s caloric intake rose by 18 percent in the first year and 14 percent in the second. Food quality also improved: researchers measured higher dietary diversity scores and increased consumption of proteins, iron and other key nutrients.
The study found that about 41 percent of each rupee transferred was spent on food, a share similar to that of food subsidies provided through the Public Distribution System. This suggests that cash and in-kind transfers may have a similar impact on food consumption.
Transfers also shifted household resources in favour of women. In the control group, lactating mothers consumed 17 percent fewer calories than other adults, far below clinical recommendations. Transfers helped close this gap.
“Our results show that marginal income transfers controlled by women may reduce intra-household consumption inequality, which may be an important benefit from India’s growing use of cash transfers to women.”
Older siblings under 10 years in treated households also showed meaningful improvement in weight-for-age, averaging 0.11 standard deviations. The data suggest that catch-up growth is possible beyond the “first 1,000 days,” a finding with important programme implications.
Treated families were more likely to seek formal medical care for children when unwell. Mothers reported making withdrawals specifically for food and medical expenses. Households also made slightly higher use of anganwadi services, such as deworming and iron tablets.
Where the programme made the clearest impact was in functional development. At age three, treated children scored 0.12 standard deviations higher on the international Ages and Stages (ASQ-3) index, with gains across cognitive, gross motor and fine motor skills.
Parents reported that children were more likely to say their names, count, draw, fold paper, unbutton, and serve themselves food.
These results align with evidence from Latin America, where cash transfers produced similar gains in child development, according to the paper. The authors note that such developmental benefits may matter even more in labour markets where skills related to “brains” carry higher returns than “brawn.”
“From a policy perspective, our results may underestimate the aggregate economic benefits of cash transfer programs to women, because they come from an experiment designed to study impacts on recipients as opposed to general equilibrium effects,” the authors note.
“However, large-scale cash transfer programs to women—as currently being implemented in many Indian states—are likely to generate such effects through aggregate demand externalities, which may amplify the benefits.”
Despite better diets, there were no significant average improvements in height-for-age or weight-for-age for target children.
The researchers found strong evidence of interaction with sanitation. In communities with lower open defecation, treated children recorded significant improvements in weight-for-age, while those in areas with poorer sanitation did not. Sanitation did not affect nutritional intake, but it clearly determined whether nutrient gains translated into physical growth.
“[It] suggests that the impact of poor sanitation in weakening the translation of increased nutrient intake into child growth may be more pronounced for younger children,” the authors note.
“Our findings reinforce the argument that poor sanitation may be a key explanatory factor for India’s uniquely poor child health outcomes. Prior work has shown that levels of sanitation affect child health by increasing susceptibility to intestinal disease and diarrhoea, which sap the body of nutrients and energy needed for growth.”
(Edited by Dese Gowda)
