A foray into the potential impact of private sector participation for women economic empowerment in India
The private sector is emerging as a powerful participant in the design of policies and regulations as economic growth is one of the most critical outcomes targeted by policymakers. The innovation & execution capabilities of the private sector can unlock the impact potential of new technologies & business models which have the potential to support millions of women in India, especially from low-income households.
“Jobs will be lost; more debts will be incurred; daughters will eat smaller meals; the sick will die undignified deaths; new ways of life will be found. Every generation has witnessed the dance of crisis and resilience, but you complain that none of these changes have ushered a radical shift in who fetches the water, who cooks and cleans, and who feels entitled to disrespect you.”- Excerpt from Desperately Seeking Shah Rukh by Shrayana Bhattacharya
Recently, Dr. Nemat Shafik dismissed the talk of her breaking any glass ceiling on being appointed as Deputy Governor of the Bank of England. Rather, she described her appointment as getting across a ‘sticky door’, referencing millions of sticky doors women must cross every day to be a part of the workforce and become empowered in the truest sense.
What prevents women from joining the workforce?
In 2020, the World Economic Forum report on gender gaps in economic participation and opportunity placed India in the bottom five countries of the world, with Pakistan, Syria, Yemen, and Iraq. This is despite the rapid increase in educational attainment and declining fertility among women in India.
Female labour force participation rate has been on a consistent decline- falling from 16.4% in May-Aug’16 to 9.4% in May-Aug’21. According to World Bank estimates, India has one of the lowest female labour force participation rates in the world. Less than a third of women – defined as 15 or older – are working or actively looking for a job. Of the approximately 432 million working-age women in India, about 343 million are not in paid formal work.
This can be explained by a slew of socio-economic factors faced by a working woman, which act as sticky doors making it difficult for women to work or remain in the workforce.
- In the traditional framework of the labour market, a male worker maximizes his utility based on his division of time between leisure and labour work. But a woman’s decision to join the labour force is based on her ability to allocate time among leisure, work at home, and work in the labour market. Indian women put in 3.26 billion hours of unpaid care work every day at home. This unpaid care work is one of the sticky doors restricting their participation in the workforce.
- Marriage is another sticky door. With neo-traditional ideals placing men as the breadwinner and women as ‘secondary earners’, being widely prevalent, women’s engagement in the labour force is limited to a ‘need-basis’- supplementing family income in absence of a man or supporting in case of limited family income.
- Women continue to face a severe ‘motherhood penalty’ in the Indian job market. As per data from CMIE for 2019, only ten percent of mothers from the wealthiest segment of urban India, those between the ages of twenty and fifty-five, held a paid job. Even with expanded maternity leave following an important legislation in 2017, employers offer little flexibility to handle jobs and childcare. In the past 5 years, the number of creches supported under the National Creche Scheme has fallen by more than 60%. There are few incentives for Indian women to return to work after motherhood.
- For working women who want to migrate to the cities, affordable and accessible accommodation facilities are non-existent. Since its inception in 1972-73, 952 hostels have been sanctioned under the scheme all over the country for benefit of about 72,268 working women. Add to that, there are hardly any migration support centres in India, leaving millions of women who wish to migrate to cities for employment with no support system.
What prevents women from becoming entrepreneurs?
There are 13.5–15.7 million women-owned enterprises, representing 20% of all enterprises in India. While large in absolute numbers, these are overwhelmingly single-person enterprises. Further, several enterprises reported as women-owned are not in fact controlled or run by women. Surveys across parts of India suggest that 10% to 30% of such enterprises are often not run by women.
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Unfortunately, women have to face sticky doors in entrepreneurship as well, as a result of which India ranks 70th among 77 countries covered in the Female Entrepreneurship Index.
- More than 70% of women entrepreneurs are unable to access credit from formal channels.
- Moreover, they have very little access to networking and mentorship facilities and the absence of any sort of structured knowledge of customers, suppliers, and market trends. Women entrepreneurs tend to focus primarily on their local markets. The rate is highest in India, where 81.4% of women report a local focus for their business compared to two-thirds of men.
Accelerating the quantity and quality of entrepreneurship towards such benchmarks can create over 30 million women-owned enterprises, of which 40% can be more than self-employment.
How the private sector can remove the stickiness of doors?
The invisible hand of the market has often shown the potential to fill the unmet needs faced by the citizens. Consider Urban Company, an at-home service provider for instance. They have provided a platform for women to engage in part-time income-generating activities, giving them the required flexibility to choose work hours, tasks, etc, and provide them with a stable income. Around 15-20 thousand women are engaged with Urban Company currently and are earning between INR 20,000 and INR 50,000 per month, at times even up to INR 100,000 per month. Urban Company has also recently announced an industry-first INR 150 Cr. Partner Stock Ownership Plan (PSOP) which would create wealth, beyond income, for many of these women.
Similarly, Meesho, a social commerce platform, has provided opportunities for millions of small retailers to sell their products via social media platforms. The fact that 9 million women constitute ~75% of the sellers on the platform shows the immense role the private sector can play in empowering women. Zomato has recently set a target to onboard at least 10% women partners in a year, highlighting the increased focus on women participation on gig platforms.
The private sector is thus emerging as a powerful participant in the design of policies and regulations as economic growth is probably the most critical outcome targeted by policymakers. The innovation & execution capabilities of the private sector can unlock the impact potential of new technologies & business models which have the potential to support millions of women in India, especially from low-income households.
High growth areas for women participation
Technological innovation & business models in the Indian private sector are evolving rapidly. This frontier of market innovations and growth will be further catalysed for low- and middle-income citizens who demand unique solutions and will be the next engine of growth for Bharat.
As part of this engagement, we partnered with Gates Foundation to analyze high growth areas for women’s economic empowerment and estimated the impact potential over the next 5 years. For this, we undertook detailed discussions with founders/ CXOs of 60+ private sector players across industries to understand the emerging market opportunities, their core characteristics, supply & demand side participants, drivers & enablers, and the role we can play in influencing their gender-responsive evolution.
Working with the private sector to create economic empowerment opportunities for women
Going forward, we are exploring partnerships with the private sector to unlock economic opportunities for women at a large scale with 3 key outcomes:
- Increase in income of women already in the workforce (jobs/ entrepreneurs) via the high growth areas identified.
- Improve access to opportunities for those who are currently not in the workforce by leveraging technology and innovative channels.
- Increase retention in economic activities by strengthening support structures.
With women always being undervalued in the workforce and beyond, the private sector reaps hope for India and the kind of future women envisage to bring for themselves. The key idea is to identify these gaps and turn them into market opportunities.
- World Economic Forum report on Gender Gaps, 2020
- CMIE Data- May-Aug’16
- CMIE Data- May-Aug’21
- World Bank Data
- Labor Force Participation of Married Women: A Study of Labor Supply, Mincer 1962
- Oxfam report, Time to Care 2020
- WOMEN AS SECONDARY EARNERS- Gendered preferences on marriage and employment of university students in modern Indonesia by A.J. Utomo
- Rajiv Gandhi National Creche Scheme
- Press Information Bureau, Ministry of Women and Child Development
- GEM, 2014
- Financial Inclusion for Women owned MSMEs, International Finance Corporation
- Global Entrepreneurship Monitor, Women’s Entrepreneuship Index, 2021
- Women Entrepreneurship in India report, Bain and Google, 2020
- Unlocking women in the platform economy, Ola Mobility Institute, 2021
- Urban Company Press Release, March 2021
- Meesho blog
- Zomato press release, 2021
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About the author
Srishti works as a consultant at GDi Partners, a social impact consulting firm. Motivated to create impact, Srishti aims to leverage her experience working with diverse stakeholders to solve the myriad problems plaguing our society. She strongly believes in the power of bringing about systemic change and one day wishes to see a world, where everyone has equal opportunities, no matter what.