A study by the Fiscal Policy Institute (FPI) has found that Karnataka’s Shakti scheme, which provides free bus travel for women, is contributing to the state’s GST collection while also increasing female participation in the labor force. The scheme, launched in June 2023, has resulted in a presumed increase of Rs 309.64 crore in GST collection from June to March this year.
The study, which is the first to quantify the financial impact of Shakti, suggests that the money women are saving on travel is being used for consumption activities, generating revenue for the government. The study calculates that Shakti can generate GST revenue of Rs 371.57 crore in 2024-25.
Another study by JustJobs Network in collaboration with the FPI found that the average savings due to fare-free travel under the Shakti scheme are significant, ranging from Rs 681 in Udupi to Rs 1,326 in Bengaluru.
The FPI study also found that the Shakti scheme is contributing to more women taking part in employment activities. The study compared the Female Labor Force Participation Rate (LFPR) and Worker Population Rate (WPR) before and after the implementation of the scheme. The LFPR rose from 25.1% in October-December 2022 to 30.2% in the same period of 2023, while the WPR increased from 23.7% to 28.8% over the same period.
The study concludes that safe and affordable modes of transportation, such as the Shakti scheme, can not only increase female participation in the labor force but also provide them with an opportunity to actively contribute to the nation’s economy.
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