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Women Entrepreneurship – Tool to Tackle Unemployment in India

Women Entrepreneurship – Tool to Tackle Unemployment in India

By January 2020 the World Employment and Social Outlook: Trends 2020 (WESO) report forecasted that unemployment would increase by around 2.5 million. It further predicted observing the factors like labour market inequalities and the data available and calculated that the income inequality has surged above than expected, particularly in the developing nations. In addition, there is a likely edging of moderate or extreme working poverty in 2020-21 in the developing countries points the report, which scenario shows an increase in the blockage to achieve eradicating poverty everywhere by 2030.[1]

While WESO report has forecasted the scenario at the global level, India can tackle the situation through encouraging women entrepreneurship states an article published on the World Economic Forum.[2]

Based on the fact that Indian women currently own twenty percent of the businesses in the country, it is estimated that by encouraging women entrepreneurship India could provide jobs to 170 million people by 2030, states a report by Bain & Company and Google. [2]

Who is a woman entrepreneur?

In the Indian context, women entrepreneurs are defined as “The women or a group of women who initiate, organize and operate a business enterprise.” [3]

Where is women entrepreneurship heading?

As such women entrepreneurship is expected to hit a whopping 9 lakh new entrepreneurs by 2025. These new players are expected to be in the sectors of food and education states a report on women entrepreneurship in urban India by Global Alliance for Mass Entrepreneurship (GAME) and Facebook. The report further states that other sectors that comprise 65% of women-owned businesses are textile, food, personal services and education.

In detail, there are 21.8 lakh women-owned businesses in urban parts of India, which has a industry split of 6.8 lakh in textile and 5.5 lakh in food, whereas, only 2.5 lakh are in personal services and a 1.2 lakh in education. However, Food and Education top the entrepreneurship choice of women as acquiescent areas as these sectors proffer maximum fiscal potential and are simple to launch. There is an expected 6.5 lakh women entrepreneurs to emerge in the food industry, while education is expected to turn out 2.5 lakh of them. Importantly, these women-owned businesses account for 58% of female employment in urban India, states the report. [4]

While the women-owned businesses forms 58% of female employment in urban India, as per a new research there is an overall decline in the women workforce participation to 24.8% in 2020 from 34% in 2006.[5] Let us take peek into what factors impact women workforce participation in the Indian geography.

What factors impact women workforce participation in the Indian geography?

Widely, employment opportunities for women are narrow due to various factors, which predominantly include a prevailing tradition of familial responsibility, and societal patriarchy. Further, India has the lowest ratio of women in paid work hovering just more than 23 per cent, whereas there is a relative rate of 78 per cent for men, which is a stark contrast. Hence, women-owned businesses shall be encouraged to increase the opportunity for women employment apart from addressing the gender parity issues in the general pool. While employing women into the workforce, women entrepreneurs shall concentrate on these laws to encourage women join and grow with them.

1) Equal Pay for Equal Work

The Equal Remuneration Act 1976 visibly states under Section 4 that no discrimination in compensation between men and women performing same type of job.

2) Equal Opportunity Equal Pay

Equal Remuneration act, 1976 further talks about giving equal opportunity to men and women for securing an employment and no discrimination in recruitment is to be made as per Section 5 of the very act. The act was amended in 1987 to incorporate “condition of service following recruitment for instance promotions, training or transfer”, thus making the sphere broad enough to keep a women’s right at the time of appointment and at all ensuing stages. Further, a similar line of right in Article 16 talks about equal opportunity in work in public offices, an extended face of Right to Equality brilliantly made out into another article to emphasize its significance. It is to be also made known to all women out there that nonconformity to these provisions would lead to legal consequences.

3) Sexual Harassment at work

Sexual Harassment of women at workplace (Prevention, Prohibition and redressal) Act, 2013 provides the definition of sexual harassment with list of actions that constitute an act of such harassment and prohibited such act particularly by those in workplace who put into effect the power of authority over women, which is common in organisational structure in order to protect them from sexual abuse whether it is public or private organisation. Knowing these rights is essential for all working women and entrepreneurs.

4) Maternity benefits at work

Maternity Benefit Act of 1961 amended in 2017 provides for a period of 26 weeks of paid maternity leave for women staff expecting their first or second child. This provision is generous as compared to other nations that provide only 8 to 17 weeks. In India this 26 weeks’ payment is to be borne by the ‘employer only’. Women entrepreneurs can more likely exercise this act for the benefit of the female workforce, which shall address one of the pressing problems of work-life balance. However, government there is still an opportunity to strike a balance that benefits the employees and the employer.

5) Labour Laws

Knowledge of labour laws is a must for all entrepreneurs in general; women must have a grasp over it too. These laws can be with relevance to minimum wages, gratuity, PF payment, weekly holidays, maternity advantages, harassment, and payment of bonus etc. A start up registered under the Start-up India program has the choice to finish self-declaration for nine labour laws within one year and acquire an exemption from the labour review.

The nine laws are as follows:

  1. The economic Disputes Act, 1947
  2. The Trade Unit Act, 1926
  3. Building and Other Constructions Workers (Regulation of Employment and Conditions of Service) Act, 1996
  4. The economic Employment (Standing Orders) Act, 1946
  5. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act,
  6. 1979 The Payment of Gratuity Act, 1972
  7. The Contract Labour (Regulation and Abolition) Act,
  8. 1970 The Employees & Provident Funds and Miscellaneous Provisions Act,
  9. 1952 The Employees & State Insurance Act, 1948.

If a start-up opts a precise employee policy, then it might give an edge over other start-ups. This may also aid recruitment and retention. Moreover, this may enhance employee’s spirits and output on the whole. [7]

Reference(s):

[1] https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_734454/lang--en/index.htm

[2] https://www.weforum.org/agenda/2020/02/unemployment-india-female-entrepreneurs-gender-solutions/

[3] https://www.economicsdiscussion.net/entrepreneurship/women-entrepreneurs-in-india/32337?__cf_chl_jschl_tk__=f1ff779c02d4af3735510a385c8966f506374c00-1600326965-0-AZ21d0LZ9cZvHfVUCSJsrRozMP8gYmpen6vrYtFy10JmP4p22c-ITm6fyTcJuJYc56VZRC6yLCHWgok9_J7b1PN4WULIfLJyKZHa_ht5r93qtwFNF89nMK5GlTLuuSjvCUK0jBpSElQigJNLmsDFfgMr91KqjA4PVXh6z90xHD8fwBn3D67XZk1lbmQOvaYmmp5b66DKBMpSpasFpu41IJ7L7j3OyfvrpBzjlMjRxxn5ZbQQk90IJUKFHyf7cBgrmE54g3MtdEawqwaoPTdzL8SxExmNSncVnATmWKUvz-q5Fyq97k5l0iujQjhJmdtnD74CQMZHCd8v8KthIpmjAbE

[4] https://www.financialexpress.com/industry/sme/msme-other-women-entrepreneurship-small-businesses-msme-startups-women-in-startups-women-leaders-game-facebook/1792333/#:~:text=%E2%80%9CWhile%20textile%2C%20food%2C%20personal,entrepreneurship%2C%E2%80%9D%20the%20report%20said.

[5] https://www.business-standard.com/article/pti-stories/female-labour-force-participation-in-india-declined-from-34-pc-in-2006-to-24-8-pc-in-2020-study-120030601403_1.html#:~:text=Female%20labour%2Dforce%20participation%20in%20India%20has%20declined%20from%2034,according%20to%20a%20new%20study.&text=The%20female%20labour%2Dforce%20participation,in%202020%2C%20the%20study%20said.

[6] https://www.weforum.org/agenda/2019/10/indian-women-employment-entrepreneurs-change

[7] https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/india-construction.aspx#:~:text=%22An%20act%20to%20regulate%20the,connected%20therewith%20or%20incidental%20thereto.%22