Where have all the women gone?

Officials in the finance ministry are busy with budgetary consultations.

At the outset, it needs to be recognised that the Union Budget is more than a mere accounting exercise as it lays out the vision of the government and provides a strategy to implement it during the course of that year.

In recent months, the Centre has been making efforts to encourage economic activity, such as the recently announced Start-up India initiative.

In continuation of that effort, the Centre can also consider some more incentives and measures that can be implemented through the Budget to encourage women to actively participate in the workforce.

In India, only about 30 per cent of women are in the workforce. Nepal, in contrast, has nearly 80 per cent women in the workforce followed by China (71 per cent), Bhutan (67 per cent), and Russia (57 per cent). Closely related to low workforce participation are issues such as preference for a male child reflected in an adverse sex-ratio. According to Census data, the State-wise child sex ratio (CSR; number of females per 1000 males in 0-6 years age-group) for 2001-2011 has deteriorated.

However, the overall sex ratio recorded an improvement but has deteriorated in some States (Bihar and Gujarat). The figures are not promising compared with the US (1025), Brazil (1042), Russia (1167), Japan (1055), Sri Lanka (1034).

Further, new government data reveals that the preference for a male child continues.

To enhance workforce participation, the government could also consider recruiting more women in the armed and police forces. According to some estimates, women constitute only 3 per cent of the police force in India and a small number in the army. In contrast, women play an important role in the armies of the US, Israel, China, Russia, Sri Lanka and Pakistan.

India could consider Sainik and Military schools/colleges for female students and women could be encouraged to join the defence forces; in fact, the National Cadet Corps can be extensively used in colleges and universities to showcase job opportunities. In the recent Seventh Pay Commission report, it was mentioned that the army is short of officers by nearly 25 per cent, the navy is short by 17 per cent and the air-force by 4 per cent. The short service commission (SSC) can be tailor-made to suit the psychology of Indian families that insist women should get married and start their own families before they turn 30. The SSC, with a provision of five or ten years’ service is most suitable in such circumstances. Similarly, the judiciary suffers from a serious shortage of court and legal staff. It would be useful to have more female participation in legal services. India could consider introducing the study of law in school itself, and encourage women to study and practise law.

To enhance female workforce participation, another out-of-the-box view needs to be considered. It is established that women demonstrate responsible behaviour in financial matters and their income is generally used to finance family expenditure. Therefore, the Centre could consider offering higher or complete exemption from income tax for working women. As the income earned by women is spent on the family, and more women will be encouraged by this measure to enter the workforce, indirect tax collection on goods and services would improve.

Therefore, it will not impact the national or state fisc. Similarly, to incentivise female participation in self-employment, especially in micro, small and medium enterprises, a tax holiday could be offered to MSMEs run by women entrepreneurs. The government could also consider special provisions for women entrepreneurs and longer tax holidays under the startup initiative.

In modern India, the need is to financially empower the girl child like the boy child, offering equal opportunities, and encouraging independence in decision-making. Until parents internalise the equal value of a girl child, at least financially, a change in preferences is difficult to achieve. While social reformers may have to devise ways to ensure that girls and boys enjoy a similar status, the Union government and Budget 2016 could also help initiate this change. India’s ascent to a higher growth trajectory will be aided if female participation in the workforce in enhanced.

The writer is RBI Chair professor of economics at IIM Bengaluru