India is facing a crisis buried within a conundrum.
On the one hand, it is the fastest-growing major economy globally. The last few months of this year have seen everything from tax (GST) collections to exports hitting all-time highs. Earlier this week, the country’s 100th unicorn 100th unicorn Mint India sees birth of its 100th unicorn, total valuation reaches $332.7 bn Read more was anointed.
On the other, the percentage of its vast labour force aged 16-64 actively looking for work has been falling consistently. From 58.3% in 1990 to 45.5% in 2021 to as low as 39.5% in the first quarter of 2022. Economists call this key metric the labour force participation rate or LFPR.
If you thought that was the crisis, you’d be forgiven. But no. Buried within that falling overall LFPR is the low female LFPR signifying the number of women who stopped actively looking for work.
That number was just 9% for January-April 2022—down from 11% during the same time period in 2019 — according according CMIE Unemployment in India Read more to the Centre for Monitoring Indian Economy (CMIE). The male LFPR rate during the same period was 66.4%.
In other words, less than one in 10 working-age women in India are even demanding work.
Indian women fare worse than virtually all of their neighbouring citizens in countries like Bhutan, Nepal, Sri Lanka, Bangladesh, and Pakistan. Only Yemen, Iraq, Jordan, Syria, Algeria, Iran, Afghanistan, and the West Bank and Gaza have a lower female LFPR rate.
To say that India is an outlier, whether relative to its economy or on an absolute basis, would be an understatement.
It is well documented how women face a disproportionate share of challenges while trying to enter or stay in the labour market. These range from access and choice of work, working conditions, employment security, wage parity, discrimination, and arguably the biggest of them all—balancing the competing burdens of work and family responsibilities.
It was in this scenario that in 2017 India decided to become another outlier. It increased the duration of maternity leave for women from 12 weeks to 26 weeks, catapulting it to third place globally, behind Canada and Norway, which give 50 and 44 weeks respectively.
But the Act has essentially increased the hiring costs for most women employees in India.