The decline in India’s female labour force participation rate can be reversed by improving women’s access to higher education and having maternity benefits for informal-sector workers
Further, the endorsement for digitising economic activities, health services, and financial transactions, could bring several women into the formal system.
By Urvashi Prasad & Pankhuri Dutt
A New India can be built only when women have access to equal social and economic opportunities. In this context, the statistics on Female Labor Force Participation (FLFP) are worrying to say the least. According to ILO estimates, India’s FLFP has declined from 32% in 2005 to 21% in 2019. Economic Survey 2020 estimates that 60% of women between 15-59 years are engaged in full-time housework as compared to 1% of males.
Several factors have emerged as possible contributors to this situation, including a rise in household income levels, which in turn reinforces the patriarchal notion of women working only when they “need” to; mechanisation of agriculture and emergence of technologies that automate routine work; lack of flexible work opportunities; discrimination at the workplace as well as concerns regarding safety. The private sector’s growth has also not been fast enough to absorb the increase in female labour supply. Further, there are social and cultural stymies to women’s economic participation, like hindrances to inheriting property and diminished access to formal credit due to lack of collaterals.
The government has launched a slew of initiatives to address these challenges, such as the Maternity Benefit Act, Stand-Up India and Pradhan Mantri Mudra Yojana (PMMY). At least 75% of PMMY’s total beneficiaries are women. In FY22 Budget, the margin money requirements for loans under Stand-up India have been reduced from 25% to 15%. Cognizant of the income gender gap caused by the Covid-19 pandemic; the government has supported 20 crore female-account holders under the Jan Dhan Yojana through cash transfers. It was also announced in FY22 Budget that social security schemes’ benefits will be extended to gig and platform workers. Further, the endorsement for digitising economic activities, health services, and financial transactions, could bring several women into the formal system.
So, what more can be done to reverse the declining FLFP rates?
First, we need better data to capture women’s contribution to the economy through paid and unpaid work more accurately. For instance, gender-disaggregated data from the annual Periodic Labor Force Survey can help develop more targeted policies for women in rural and urban areas.
Second, women’s access to and enrolment in higher education must be prioritised. As is widely acknowledged, India has nearly universalised primary education. However, many girls drop out at the secondary school level and still fewer go on to complete higher education. Economic Survey 2020 highlighted a strong correlation between the level of education and domestic work, with only 5.3% of highly educated women in the age group 15-59 years engaged in full-time domestic duties. Even the U-shaped relationship between income levels and FLPR posits that after a certain income level, FLPR increases only with higher education levels among women.
Third, the implementation of various progressive legislations and policies like the Maternity Benefit Act and Code of Wages needs to be monitored rigorously through audits. There is a need to launch professional development and re-entry programs for women post-childbirth. Paternity or family leaves should be mandated to diminish the stigma against taking a break after childbirth. Of course, given that most female workers are still in the informal sector, there is also an opportunity to extend the Maternity Benefit Act to informal workers and collaborate with the private sector for providing mobile crèches.
Fourth, skill training programmes that enable women to venture into non-traditional occupations should be emphasised. To ensure equity of access and opportunity, 50% of placements provided through skill development programmes should be allotted for women. These programmes should also include information about employment contracts and comprehensive coverage of the rights to leave, equal pay, and other such benefits.
Fifth, infrastructure has a major role to play in enabling more women to join and remain in the workforce. Aspects that require special attention include residential hostels and safe public transport options in towns and cities. As more women join the formal labour force, it will also create job opportunities for others in the care economy.
Last but most certainly not least, the private sector must walk the talk on gender parity. While the government can play a role by providing tax incentives, its actions alone will not suffice. In addition to the pay gap, women are highly underrepresented in leadership roles in the private sector.
The bottom line is that investing in women boosts economic development, competitiveness, job creation and GDP. While there is no magic bullet for bridging the gender gap in the workforce, a comprehensive approach involving the action of the private sector and government efforts can help reverse the worrying labour force participation trends.
Prasad is a public policy specialist, and Dutt is a public policy consultant, NITI Aayog. Views are personal