Increasing women’s employment and entrepreneurship is not just the right thing to do but the smart thing to do.
The women’s movement gathered force in the 20th century, and women are increasingly educated, decision makers and part of the workforce at all levels, especially in countries with higher incomes. Many causes have been attributed. The rise of contraception, both technology and acceptance, in Europe and America from the late 19th century onwards was certainly a major influencer. Total fertility rate per woman fell from highs of seven at the beginning of the 19th century to below two in most developed countries today.
With almost 20 per cent to 30 per cent of the women in developed countries childless, and otherwise with only one or two children, women were no longer either pregnant or lactating, and they had time on their hands to use their energies and intellect. Coupled with the rise of the rule of law, which allowed women to live and travel alone safely, women became part of the workforce. A steady increase was seen along with sudden jumps caused by events like World War II, where women took on numerous jobs in the absence of the men who had gone off to fight, and would not relinquish them when they came back.
The Female Labour Force Participation (FLFP) is around 60 per cent in European countries and 64 per cent in China. There is pressure to bring women into the workforce all around the world as with declining fertility rates, the next demographic dividend has to come from women. In India, it is currently 27 per cent. We are near the bottom of the heap.
There is an interesting fallout of higher female participation in the workforce. In Europe, surprisingly, the lowest fertility rates (children per woman) are seen in traditionally family-oriented countries like Spain, Italy and Greece (at about 1.3), while the Scandinavian countries and France have close to 2. Studies have identified that this is related to the availability of good and affordable childcare as also cultural factors. In countries like Italy, childcare availability is a problem, also there is pressure on women to stay at home and look after the children. This causes women to postpone or avoid childbearing as they do not want to give up their careers. In countries with good childcare, women can have children and not give up work, so they have more children.
What about India? Many say that women are doing very well in India—we see them as Presidents, Prime Ministers and business leaders. Men make jokes that it is they who now need to be protected.
Of course, for India in particular, it is difficult to make blanket statements: there are many Indias which exist concurrently. There are extremely empowered women in all professions, alongside women who live in medieval seclusion with practically no rights. In fact, a historian once said that in India, all Ages of Man coexist—there are still people living hunter-gatherer lifestyles, Neolithic lifestyles, medieval lifestyles, as well as the most modern developed-world lifestyles.
While the Indian Constitution grants equal rights to women, and India has some of the most progressive laws in the world, gender inequality shows up visibly in many measures.
The 70 MILLION MISSING
The most disturbing is the skewed sex ratio in the population. There are 940 females for every 1,000 males as per the 2011 census. In developed countries, the number is typically about 1,050 females to 1,000 males. With the Indian population at 1.3 billion, a simple calculation will bring forth that there are about 70 million missing women! Some have been aborted in the womb, some have died of relative neglect in childhood, some during childbirth. According to a UN study, a girl child has a 75 per cent higher chance of dying than a male child in our country. In the 2000s, there were 56 male child deaths for every 100 females in India, compared with 111 in the developing world. A major cause for this is the prevalence of a pernicious dowry system (though illegal), especially in the North and West of India, where many years’ income gets spent during a girl’s marriage.
As per the Global Gender Gap Index by the World Economic forum, in 2014, India ranked 114 amongst 142 countries in the economic participation gender gap. Literacy rate for women is 65 per cent, while for men it is 82 per cent. The silver lining is that we were ranked 15 in the political gender gap.
WHY SHOULDN’T OUR WOMEN WORK?
Women own a minuscule fraction of land assets in India, estimated at less than 5 per cent in many states. Though the law gives equal inheritance rights to men and women which could be expected to right this situation in a generation, only a very small percentage of women claim any right in their parental property, as traditionally their dowry is considered their share of inheritance, and other property, especially land, is supposed to belong to her brothers. It is socially not acceptable for women to ask for a share in familial property. Daughters are systematically discouraged from making any claims on parental property, especially land.
Looking at economic data, women own 10 per cent of MSMEs (micro, small and medium enterprises) of which 90 per cent are micro businesses, and account for only three per cent of the output. FLFP is only 27 per cent. We are 11th from the bottom amongst 131 countries according to the International Labour Organization (ILO). The most shocking fact is that it is consistently falling from a high of 40 per cent plus in the mid-1990s.
Eighty per cent of these women are self-employed and only 20 per cent work for a salary, as opposed to developed country figures of 90 per cent salaried women and 10 per cent self-employed. This is also a further indication of how difficult it for women to find jobs in India.
Why has FLFP fallen? It has long been observed that there is a U-shaped relationship between years of education for women and their labour force participation rates. Very poor women need to work, and well-educated women tend to go out and get jobs. But women in the middle education and income group tend to stay at home. Urban participation is as low as 14 per cent. An unexpected consequence of liberalization and rising incomes from 1991 onwards, is that more men think they can manage the expenses on their own income, and women are increasingly encouraged to stay at home.
Another factor is that much of India’s growth is jobless growth.
But why is it important to empower women and encourage them to work?
The Right Reasons: The first reason of course is to stop the genocide; two million girls are killed in the womb each year, because they are perceived to be of low or negative income value. Also freedom of choice, equal opportunity, lack of discrimination and economic independence are basic human rights, and should be available to all genders.
The Smart Reasons: According to a report by McKinsey, bridging the gender gap at the workplace could increase Indian GDP by 60 per cent by 2025.
Income spent by women also give rise to a double dividend; they spend a higher percentage of their income on health and education of their children, causing a higher build-up of social capital.
WOMEN ON CORPORATE BOARDS
When we look at women’s participation on corporate boards, much research has been conducted across the world, and the answer seems quite conclusive. Boards with more women directors financially outperform boards with fewer. A study by talent management research firm Catalyst found that Fortune 500 companies with the highest representation of women board directors attained almost 50 per cent higher returns on investment on average, than those with the lowest representation of women board directors. Research also shows that a “critical mass” of 30 per cent or more women at board level or in senior management produces the best financial results. This is supposed to work because diversity prevents groupthink, and brings additional perspectives to any decision.
Thus, increasing women’s participation in the workforce is the right and smart thing to do. To bring about change is a long-term process, as there are problems both in the motivation level of the women because of conditioning and the surrounding cultural factors, and also lower access to resources and markets.
Improving education for girls is of course the first step. Sensitizing both men and women on gender equality, and working on cultural change is something all walks of society have to participate in. All sectors of industry should be encouraged to employ more women and create gender budgeting.
However, I would like to suggest some concrete and reasonably easy steps which can be taken by the government.
HOW TO INCREASE EMPLOYMENT
• At the board level, 30 per cent of the directors should be women; this is in line with legislation in most European countries.
• There should be a compulsory reporting in companies’ balance sheet of the percentage and number of women employed at board, senior, middle and entry-level management.
• Introduce gender-specific policy and gender budgeting in each Sector Skill Council. Skill women in non-traditional jobs to shatter gender myths. FLO (FICCI Ladies Organization) is extensively training women as taxi drivers.
• Extended school hours with extracurricular activities in the latter half is a solution many countries like Iceland have adopted to free the working day for women. Schools should be encouraged to do so by incentives. Companies should be incentivized to open creches for pre-school children. The government should incentivize the childcare industry.
HOW TO ENABLE ENTREPRENEURSHIP AND IMPROVE ACCESS TO FINANCE
• Appointment of a designated and specially-trained Woman Loan Counselling and Assistance Officer for women in bank branches.
An IFC study states that only three per cent of the three million women-owned enterprises in India are accessing formal finance. Their estimation of the unmet demand for credit from women-owned enterprises in India is Rs. 600,000 crore. Another IFC study indicates that the rejection rate for women’s applications for bank loans in India is 2.5 times higher than that for men. The reasons may be inadequate documentation, lack of credit history, lack of collateral, gender bias, and insufficient previous experience in getting bank loans, which leads to a difficulty in filling out complex documents. Many women also do not apply for credit because of low expectation of getting it.
A specially-trained woman loan counsellor who could walk the women through the loan application process, counsel them about the various schemes available, especially availability of collateral-free loans, could greatly increase uptake of business loans by women.
• Collateral-Free Loans. While there are government schemes such as the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) which guarantee collateral-free loans given out by banks upto Rs 1 crore, bankers are reluctant to share the details with customers since they have had a very high percentage of non-performing loans under these schemes. Banks could however encourage women to take loans under these schemes since women have better records in paying back loans.
An IFC study states that gender-disaggregated data from banks indicate that non-performing loans are 30 to 50 per cent lower in women-owned businesses.
• Banks should create special product and marketing programmes to lend to women. Women’s businesses are a valuable opportunity for banks, and they should be encouraged to create special programmes to lend to women, in partnership with women’s business forums and the Government. Banks like Wells Fargo in the USA have succeeded in this.
• Seed Capital fund. Women’s seed capital funds should be created to help women with their promoter’s contribution for projects.
INCREASING LANDOWNERSHIP BY WOMEN
Land ownership by women in India varies from 2 to 10 per cent in various states. Without land titles, women have limited access to bank credit, and cannot access government schemes and programmes.
While many governments in India offer differences of about 1 per cent on stamp duties, transfer fees and registration fees for property registered in the name of women, this is not sufficient incentive. There should be an exemption of stamp duties, transfer fees and registration fees for property registered in the name of women, or substantial rebates, at least 50 per cent. In addition, there should be no charge for addition of a spouse’s name, or for transfer to your wife.
Government programmes which grant housing to people should ensure that the property is registered either in the name of the woman, or at least jointly.
CREATE WOMEN’S INDUSTRIAL PARKS
To facilitate the difficult process of getting land allotment from the government, innumerable clearances, and bank finance, Women Entrepreneur Parks should be created where land is allotted to women-owned enterprises, and entrepreneurs are facilitated in setting up industries with single window clearances, and common facilities.
CREATE MAHILA HAATS
These should be created across the country, initially in cities, and then down to district levels, to create marketing spaces for women entrepreneurs and Self Help Groups. Encourage women artisans and small businesswomen to sell online through mainstream portals like Snapdeal by training them in e-commerce, to overcome the major problem of market access.
CREATE A PROGRAMME FOR THE GOVERNMENT TO PURCHASE FROM WOMEN
In many countries, successful programmes have been set up for governments to purchase from women. These involve setting targets for purchase, which are as high as 30 per cent in Kenya, conducting training courses in filling government tenders for the women business owners, as well as training courses for the purchase departments in government.