Arguably one of the most cited reports by global consultancy major McKinsey’s think tank McKinsey Global Institute is its 2015 report titled ‘The power of parity: How advancing women’s equality can add $12 trillion to global growth’, which looked at how much the lack of participation of women in economic activity was costing various countries and estimated how that could change if more women were active participants in the economy.

A 2018 update of that report estimated that India could add $750 billion to its GDP — around 18 per cent of GDP then — by addressing the gender gap in the economy.

Unfortunately, while that report caused a flurry of women-centric policy initiatives to be announced, the outcome has been very different. The rate of female participation in the labour force has been steadily declining. In the April-June quarter of 2020, after India imposed its first Covid lockdown, the percentage of women in the labour force plummeted to a record low of 15.5 per cent as the pandemic decimated jobs and families.

While the pandemic may have been a ‘Black Swan’ event — an unprecedented and unexpected once-in-a-lifetime kind of development — the challenge of the declining role of women in the economy has been a long-term one in India. According to World Bank estimates, India has one of the lowest female labour force participation rates in the world. Less than one-third of women in the working age are actually working or actively looking for a job.

The situation on the entrepreneurial front isn’t much better. A NITI Aayog study, ‘Moving the needle: Creating an enabling environment for women-led enterprises’, released last year noted: “...Yet, the participation of women entrepreneurs in this ecosystem remains minimal. According to the latest available estimates, of the 58.2 million micro, small, and medium enterprises operating in the country, only around 14 per cent or 8.05 million are owned by women. Additionally, women-owned enterprises in India are largely skewed towards smaller-sized firms, with almost 98 per cent of businesses falling in the category of micro-enterprises.”

These women are not “entrepreneurs” as you and I understand the term. They are basically, if I can coin the term, “subsistence businesses” with minimal capital, next to no institutional or policy support, and without the ability to generate sufficient surplus to drive growth. These are basically tiny businesses run by women in a bid to keep themselves and their families afloat.

Female board members

It doesn’t get significantly better as one goes up the economic scale either. The 2021 edition of Deloitte’s ‘Women in the boardroom’ study found that just 10.3 per cent of companies had a female board member, rising to just over 17 per cent in listed companies, where there is a government directive mandating female presence. Just 3.6 per cent of company chairpersons are women, while 4.7 per cent of CEOs and 3.9 per cent of CFOs were women.

Of course that was a sample survey but sample surveys do reflect the trend. A pilot survey by the RBI in 2019 among start-ups found that just six out of every hundred start-ups were founded solely by women. If you take start-ups with both men and women as co-founders, that share jumps dramatically to over 38 per cent.

In fact, thanks to the start-up boom in India, boardroom compositions in India are changing more dramatically — and rapidly — than ever before. According to a study by the Ministry of Corporate Affairs, which analysed 419,538 director identification numbers (DINs) registered during 2021-22, over 29 per cent of all the directors registered in the database were in the 18-30 age group.

A further 43.5 per cent were in the 31-45 years age group, which means three out of four directors fall, by definitions applicable to the political class, in the ‘youth’ bracket. There is also growing diversity, with more than 32 per cent of directors in the 31-45 age group being women. Across all age groups, the female-male ratio in Indian boardrooms was 30:70, the study found.

But has that made the situation better for women — as employees, business managers or business owners? Indications are that while things are definitely changing, radical transformation hasn’t happened yet. India ranked 75th out of 77 countries in a 2015 study. While that hasn’t been updated, the situation hasn’t changed so radically that India would find itself in the top league.

Women still find it extraordinarily difficult to start and run a business. Everything from funding to market access is a challenge. Even in the hi-tech world of start-ups and unicorns. In 2018, women start-up founders got just 5.2 per cent of the available funding. As of April this year, only 15 per cent of unicorns — start-ups which had achieved $1 billion or more in valuation — were owned by women.

In fact, 66 per cent of women registered on NITI Aayog’s Women Entrepreneurship Platform cited lack of access to funding as the biggest challenge they faced. The next biggest challenge — about 48 per cent cited this — was market access for their products and services.

As India’s experience in banking has shown, simply having women, or even women at the top, isn’t enough. While at one point six of India’s 10 biggest banks — both private and public-sector — were run by women, the government’s bid to promote an all-women bank of, for and by women, proved a failure and had to be wound up.

Youth, too, comes with its own set of challenges. While the increasingly young age-profile of company directors in India is definitely a factor in the rising number of start-ups and innovation in India, there is also some concern whether the lack of experience in the boardroom is leading to other problems, particularly regarding financial management and compliance. The rising cases of conflict between financial backers and youthful promoters is a pointer to this.

The government, industry bodies as well as professional bodies need to come together as one to hand-hold and nurture these youthful promoters and directors to ensure that in this instance at least, India’s youth in general and women in particular reap the fruits of this demographic dividend.

The writer is a senior journalist