AbstractThis article provides qualitative case studies and applies citizenship theory to reveal the way in which being in receipt of a cash transfer can help local poor and excluded Dalits to understand what it means to be a citizen of Nepal's state. Cash transfers can contribute to an individual's subjective sense of inclusion and citizenship. Although Dalits encounter disparities and rights abuses when dealing with local government over their cash transfer entitlements, their responses reveal a sense of agency in the positive way in which they interpret their entitlements. Although they may be mistreated at the local level, they feel valued because the central ‘state’ recognizes their plight and identity. Cash transfers are understood by Dalits through the lens of social exclusion, patronage, and the hierarchical society in which they live. They are an effective way of reaching large numbers of formerly excluded citizens and indicate that the state now includes them. As such, they can contribute towards building an inclusive state.