If February comes, can high-decibel talk about green shoots of the economy and the growth story be far behind In the Budget season an outpouring of suggestions rents the air. But in all the gross domestic product talk, one critical issue typically gets missed out — one sure way to boost India’s GDP is to reverse the shocking decline in the female work participation rate in the country.
How can the finance ministry help
It is no secret that India has one of the lowest female participation rates in the world. It ranked 120 among 131 countries surveyed by the International Labour Organisation in 2013. Even within South Asia, it is in sixth position among eight countries, better than Pakistan and Afghanistan, but worse than Bangladesh.
What is more worrying is that female labour force participation rates (LFPR) in India have been declining for several years now. In 2014, only 28.6 per cent of Indian women in the 15-64 age group were part of the labour force, according to the World Bank. Tellingly, the corresponding figure for women in Bangladesh was 60.6 per cent and 70.4 per cent for China.
The National Sample Survey Office says female LFPR in rural areas fell 12-14 percentage points between 2004-05 and 2010-11 — a very sharp decline.
Economists and sociologists have long sparred over the reasons for the withdrawal of Indian women from the labour force. There are many explanations like rising family incomes. Then there is the issue of underestimation. But overall, academics are increasingly acknowledging a bitter truth, i.e. there just aren’t enough suitable job opportunities for the vast majority of women in this country.
A recent report by World Bank argues that the reason for the worrying decline is a “jobs deficit”. Most women in India traditionally worked in agriculture. But the number of farming jobs has been shrinking without a commensurate increase in other employment opportunities.
In most countries, as agricultural jobs shrunk, men moved to the manufacturing sector and women to the service sector.
But India bucks the trend. With agriculture becoming more mechanised, farm jobs are reducing but the manufacturing sector has not grown sufficiently to absorb all the men who are displaced from farming.
So they crowd the service sector, traditionally a female terrain. This makes it tougher for women, especially those with little education or skills, to get formal sector service jobs.
This worrying picture is reaffirmed by a study done the National Institution for Transforming India (NITI Aayog). The study notes that poor education among rural women acts as a barrier to smooth inter-sectoral labour mobility. Nearly 69 per cent of rural women are either illiterate or have been educated only up to the primary level.
The good news is that many young women among the better-educated in urban India are looking to enter the workforce in large numbers. The proportion of working women in urban areas shot up from 11.9 per cent in 2001 to 15.4 per cent in 2011. But, sadly, most women are only able to find marginal work in the informal economy, with low wages and little or no job security.
One of the fastest-growing sectors for urban working women in India has been domestic work. And there have been some positive signs. Recently, the Rajasthan government — led by a woman — fixed minimum wages for domestic help and set limits to their working hours. From January this year, the rate for an entire day’s (defined as eight hours) chores — including cooking, washing, baby sitting and other work — has been fixed at a minimum of '5,642 per month. In case of overtime, employers will have to pay workers double the minimum fixed wage per hour for each hour. Other states need to follow suit, but have not done so yet.
So what should be done How can the Budget help
The Modi government has promised new schemes to encourage women entrepreneurs as part of Start-up India. There are various financial training and mentoring programmes that help women entrepreneurs write business plans and seek funds from banks and venture capitalists. But a lot more needs to be done.
The forthcoming Budget should provide more fiscal incentives to industries and regions that increase job opportunities for women. Equally necessary are fiscal incentives for support systems that can make this happen.
Economists like Vinoj Abraham say that creating work opportunities alone will not lead to more women in the workforce — policy interventions need to address a variety of issues, including improving women’s access to education and skills training, promoting affordable childcare to ease the burden of domestic duties, enhancing safety for women on the streets and in work places.
Each of these need resources if it is not to be empty talk. One of the most critical policy intervention needed is affordable childcare. India’s mobile crèches, most of them located at construction sites, are small-scale day care facilities that provide services to female construction workers with children. Such schemes need to be expanded to a grand scale and well beyond construction sites.
There need to be financial incentives for employers who provide access to child care facilities. These have many benefits: Decreased absenteeism and if women don’t have to constantly worry about childcare, their productivity is likely to rise. This applies to women who have jobs, are self-employed, as well as those engaged in agricultural activities. Affordable child care facilities release female siblings from child care responsibilities. This, in turn, improves the rates of primary school enrolment, retention and performance.
India has transitioned to a $2 trillion economy in the past two decades without creating adequate and secure jobs for its large, mostly unskilled labour force. Now, we have the Make in India campaign and Skill India Mission. These will achieve true success only if women, half of India’s potential work force, are part of them. So dear finance minister, do remember: Parity and prosperity can go together.
The writer focuses on development issues in India and emerging economies. She can be reached at patralekha. chatterjee@gmail.com
