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Abolish the retrograde CESS on women employment

, June 6, 2014, 1 Comments

Women Employment-MarketExpressSome truly monumental changes are taking places in the world of business, particularly entrepreneurship.

Today, a quarter to a third of all new businesses in the formal economy worldwide are started by women entrepreneurs, according to the International Labour Organisation. That proportion is higher than at any other time in history.

India too is no exception to this global trend. In recent years, a number of women have made forays into business and become well-known, sometimes even household names such as Ekta Kapoor, in the entertainment industry, for instance.

Numerous large corporates and banks in the country are also currently being headed by women: Roopa Kudva, CEO of CRISIL and Region Head, South Asia, Standard and Poor’s; Aruna Jayanthi CEO, Capgemini India; Preetha Reddy, Managing Director, Apollo Hospital Enterprises; Mallika Srinivasan, CEO, TAFE; Shobhana Bhartia, Chairperson, HT Media; and Kiran Mazumdar Shaw, Chairperson and MD, Biocon, among others.

Last year, there were four Indian women in Fortune’s top 50 women business leaders – ICICI Bank CEO Chanda Kochhar, National Stock Exchange chief Chitra Ramkrishna, Axis Bank’s Shikha Sharma, and HSBC’s Naina Lal Kidwai.

Still, the number of women entrepreneurs in the country is minuscule compared to men. Women also find it difficult to stay in the business for long as well as expand their businesses. At a much broader level, employment of women is itself still very low in India.

Why is this so? I believe that four factors are responsible for keeping women entrepreneurship in the CESS pool — Childcare, Education, Societal attitude, and Self-drive.

Lack of Childcare Facilities – Ensuring professional and affordable childcare facilities is an essential step towards enabling women to take up and retain employment. Although one may never quite achieve equality of parenthood responsibility between men and women, the imbalance remains high in today’s society, leaving a large number of women with very little choices other than opting for flexible working arrangements or even giving up work altogether.

Some women voluntarily give up work to bring up children; if they do so because they genuinely want to, their choice should be respected. However, in a vast number of cases it is the lack of childcare facilities that forces women to leave work. This has a substantially adverse impact on their career development as well as on the economy in general.

This is true not just in India but also in developed countries. For example, in the European Union, the employment rate of women aged 25 to 49 with at least one child under 12 is around 12.4% lower than the employment rate of women without any children under 12. With the rise of nuclear families in recent years, it has become increasingly necessary to have access to professional childcare facilities, other than those provided by family members and neighbours.

Lack of Education – The gender gap in India is clearly visible in the levels of education; 82% of Indian men are literate compared to only 64% of women (2009-10). Moreover, 32% of literate women leave schooling at the middle level compared with only 14% for men. Even on the degree front, women trail men: only 10.7% of educated women have a degree compared with 13.4% of educated men. There is no gainsaying the fact that raising education and skill levels in women to increase their income earning capacity will go a long way in increasing employment of women.

Adverse Societal Attitude and culture – In a number of countries women face discriminatory social beliefs and practices. Laws relating to property and inheritance also tend to be discriminatory. The World Bank’s World Development Report 2011 suggests that productivity of economies could increase by as much as 25% in some countries if discriminatory barriers against women are removed. Societal attitudes are persistent and change slowly over time, and hence, women themselves need to push for a change.

Low Self-drive – Raising confidence in their ability to participate on an equal footing with men at the workplace will support an increase in women employment. Even in a developed country such as the United Kingdom, where there are little societal discriminatory barriers against women and where women have equal access to education, almost 50% of women believe they would be further in their career if they had more self-belief (the Guardian, August 2013).

The impact of relatively low education levels, lack of childcare facilities and regressive societal attitudes is clearly reflected in the low participation of women in the labour market. While 83% of working age men (15-59 years) are either employed or are looking for work in India, the same ratio is a dismal 33% for women.

Projections for 2030 (data in millions)

Women Employment Data-MarketExpress

Note: estimates assuming labour force participation remains at the 2009-10 level

In addition to low overall women employment, out of those who are employed 63% of women work in the agriculture sector, with only 37% working in industry or service sectors. All in all, only 12 out of 100 Indian women of working age are in industry and services. With such a low share of employment among women, the probability of women becoming entrepreneurs is clearly low.

At the same women labour force participation rate as today, India’s working women population will be 110 million less than the number in China in 2030, despite having more number of working age women in 2030.

Clearly, in the years ahead, if more women among the working age population do not begin to work, India’s so called demographic dividend would be a complete waste. So, even as a nation, taking proactive steps now to boost the participation of women in employment will have a huge bearing on our ability to fully reap the benefits of the demographic dividend and make our nation prosperous in every sense of the term.

  • P V Rajeev

    It is encouraging to note that one fourth to a third of new business ventures in the formal sector world wide are started by women. One hears a lot about women’s success in employment. It is new to hear about their success in business.