A new government will soon be taking up the challenge of making India viksit by 2047. With women lagging behind on several parameters of well-being in the country today, empowering them economically lies at the heart of the challenge we face in transforming India into a developed country. What key policies can the new government adopt to propel us towards gender parity in socio-economic outcomes?
First, India’s overall employment rate has historically been around 50 per cent of the working-age population — much lower than in China (almost 70 per cent) or even our neighbour, Bangladesh (about 55 per cent), according to ILO and World Bank estimates. Bringing more working-age population into the productive workforce is critical to achieving a high GDP growth rate. Amongst the main reasons for the significantly lower labour force participation (LFP) rate in India, is women’s low LFP (currently around 25 per cent). Increasing women’s LFP to 50 per cent of labour force will bring India closer to 8 per cent GDP growth rates and a five-trillion dollar economy by 2030, according to World Bank estimates.
At the core of expanding the LFP rates of the currently low-skilled, low-educated women, is expanding our manufacturing capacity, which shrank from 17 per cent of GDP to about 13 per cent in the last decade. The Production Linked Investment (PLI) scheme aims at achieving this objective but is currently more focused on the less labour-intensive sectors. Increasing production capacity in labour-intensive sectors such as readymade garments, footwear, and other light manufacturing, where women form a large proportion of workers, and bringing them under the ambit of the PLI scheme, would address some of the cost disadvantages that India suffers from in creating jobs in these sectors due to labour regulations and constraints around land acquisition.
Second, a key marker of a developed country is a dominant formal sector. Concerns regarding India’s slow transition from low- to high-productivity activity, and the pressing need for “good jobs” abound. The underlying challenge is to provide high-quality, relevant and affordable skilling to the masses, and women in particular. While about 25 per cent of India’s employed are engaged in salaried (mostly formal sector) work, this proportion is 55 per cent and 40 per cent in China and Bangladesh, respectively. The ongoing structural transformation away from agriculture, and the informal character of the labour market, has affected women disproportionately in the past few decades — the fall in rural women’s labour force participation accompanies a high proportion of women working in the informal sector (almost 90 per cent).
Although several policy initiatives are being undertaken to improve the skilling ecosystem in India, they currently lack focus on redressing stark gender imbalances. Improving physical access, easing financial support and improving employer matches after skill training are some of the key areas that require interventions. Industrial Training Institutes (ITI) offer the most affordable and dense network of skilling programs across the country, but only about 7 per cent of those who enrol in ITIs are women. There is tremendous scope to raise the number of training institutes that cater exclusively to women from the current 17 per cent (of ITIs), in both traditional and non-traditional skills. Distance to vocational centres and credit constraints are barriers to women’s access to skilling.
Under the recently proposed National Apprenticeship Promotion Scheme, stipend support to 47 lakh youth has been promised — yet families may be reluctant to devote limited resources to the vocational training of women as they may not foresee good returns on such an investment. Besides credit access and scholarship programmes aimed specifically at women trainees, government training institutes can consider fee payments in installments or offer subsidised loans. Additionally, potential employers can enable up-skilling through performance-based incentives and zero-interest loans and salary deductions in small installments over time, post training completion. Evidence also suggests that women have worse employment outcomes even if they are skill-trained, relative to men. Career counselling, job placement cells embedded in training institutes and harnessing alumni networks to activate women “role models” and mentors for female trainees, may be effective tools to redress this gender imbalance.
Third, as India urbanises at a rapid pace, we need cities that welcome, accommodate and enable women’s mobility. Research suggests that younger married women, with young children, are not only less likely to diversify their labour to the non-farm sector, but are also less likely to migrate from the villages relative to men (with the same characteristics) when faced with adverse shocks. Physical mobility of women who reside in urban neighbourhoods is restricted although it is critical for accessing education and work opportunities. Urgent policy focus is required for planning urban infrastructure, transportation and public safety with a gender lens. With rapid demographic shifts and population ageing, a high-quality, subsidised urban care infrastructure will not only release women from care work but also create new jobs for them in this sector.
While these policies can strengthen the forces that pull women into public spaces, what measures must be adopted to push women out of their homes and the drudgery of domestic work? Public policy that furthers India’s energy transition can also incentivise households to adopt clean technology that reduces women’s time at home. Women in rural areas spend the same amount of time cooking as they would if they were engaged in part-time work: About 20 hours per week. Much of this cooking uses inefficient, polluting fuels (e.g. firewood), which require significant amounts of time to collect and cook with, besides adversely affecting women’s health and productivity. The PMUY programme is laudable in facilitating a seismic shift towards adoption of LPG, yet regular usage of LPG is only about 25 per cent of its potential. There is much that India can adopt from the Biden administration’s transformative Inflation Reduction Act — cash rebates to consumers at the point of purchase of clean technology along with production incentives that create new jobs in the clean energy sector.
As history has shown, women are empowered when they step out of their homes and enter market work only when their education levels rise and “good” jobs appear. Improving the value of investments in women’s human capital, and at a low cost, is our best bet for engendering gender parity and creating a “developed” society.
The writer is professor of Economics at the Indian Statistical Institute (Delhi) and visiting professor at the Munk School of Global Affair and Public Policy, University of Toronto
Improving value of investments in women’s human capital is our best bet for engendering gender parity
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09.05.2024
A new government will soon be taking up the challenge of making India viksit by 2047. With women lagging behind on several parameters of well-being in the country today, empowering them economically lies at the heart of the challenge we face in transforming India into a developed country. What key policies can the new government adopt to propel us towards gender parity in socio-economic outcomes?
First, India’s overall employment rate has historically been around 50 per cent of the working-age population — much lower than in China (almost 70 per cent) or even our neighbour, Bangladesh (about 55 per cent), according to ILO and World Bank estimates. Bringing more working-age population into the productive workforce is critical to achieving a high GDP growth rate. Amongst the main reasons for the significantly lower labour force participation (LFP) rate in India, is women’s low LFP (currently around 25 per cent). Increasing women’s LFP to 50 per cent of labour force will bring India closer to 8 per cent GDP growth rates and a five-trillion dollar economy by 2030, according to World Bank estimates.
At the core of expanding the LFP rates of the currently low-skilled, low-educated women, is expanding our manufacturing capacity, which shrank from 17 per cent of GDP to about 13 per cent in the last decade. The Production Linked Investment (PLI) scheme aims at achieving this objective but is currently more focused on the less labour-intensive sectors. Increasing production capacity in labour-intensive sectors such as readymade garments, footwear, and other light manufacturing, where women form a large proportion of workers, and bringing them under the ambit of the PLI scheme, would address some of the cost........
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