Union finance minister Nirmala Sitharaman unveiled the Union budget 2024-25 in the Lok Sabha on July 23, allocating over Rs 3 lakh crore to schemes benefiting women and girls and promoting women-led development. In her seventh budget speech, and the first budget of the third National Democratic Alliance (NDA) government following their recent Lok Sabha election victory, Sitharaman announced varying measures underscoring government measures enhancing women’s role in India’s economic development. A new initiative highlighted in the Union budget is the government’s plan to collaborate with industry to establish crèche facilities and hostels for working women.
The government’s emphasis on establishing crèche facilities is not unprecedented. A similar focus was evident in 2017 with the introduction of the landmark Maternity Benefit Amendment Act (MBA Act), which extended the duration of paid maternity leave from 12 to 26 weeks, comprising 8 weeks pre- and 18 weeks post-expected date of delivery in India.
Mandating the establishment of crèche facilities in organisations with 50 or more employees in the formal sector was incorporated as a substantial revision to the Maternity Benefit Act of 1961. The MBA Act of 2017 positions India seventh, globally, in terms of maternity leave duration, following Canada and Norway, where maternity leave spans 50 weeks and 44 weeks, respectively. However, it has proved to have severe adverse consequences for India’s working women. This should serve as integral lessons for the new hostel and crèche facility provisions highlighted in the latest Union budget. This amendment, hailed as a ‘historic step’ by NDA 1.0, poses some critical questions that NDA 3.0 must address to enhance women’s role in economic development.
Source of funding and motherhood penalty
The provision of the crèche facility highlighted in the MBA Act of 2017 has resulted in severe discriminatory practices against working mothers and women in India, leading to a ‘motherhood penalty’. The amendment shifted the entire onus for the extended maternity leave and the expenses of establishing and maintaining crèche facilities onto the employer.
Since 2017, many studies focusing on longitudinal data analysis on women’s employment have reported instances of employers discriminating against females in hiring practices, promotion and downsizing. Startups as well as small- and medium-sized companies were especially reported to cite inadequate performance in terminating female employees after its implementation. In some empirical studies, employers reveal that the salary reduction of working mothers further contributed negatively to family income post its enactment.
According to a 2020 survey by staffing firm TeamLease Services, titled ‘Maternity Benefits (Amendment) Act 2017: Revisiting the Impact’, five sectors – aviation, retail, tourism, real estate, and manufacturing – experienced a decline in female workforce representation. This drop in female employment resulted in a net job opportunity loss for women ranging from 9.1 lakhs to 13.6 lakhs for FY 2019-20, compared to the 13 lakhs to 18 lakhs job losses reported in FY 2018-19. Additionally, a significant proportion of women report pay disparities – 25% from multi national corporations, 30% from MSMEs, and 27% from startups – saying they earn less than their male counterparts.
But what became the primary cause of this motherhood penalty? Simply put, it is the lack of any monetary or non-monetary sponsorship from the state. As per the National Minimum Guidelines [2017], the entire onus of providing the full 26-week-long paid leave and non-monetary benefits such as establishment, maintenance and access to crèche facility for working mothers was left on to the shoulders of employers.
Notably, countries providing such maternity or paternity leaves at par with India have mixed funding models, such as Singapore, Canada, Australia, among others. The lack of funding from the state renders the policy as merely symbolic. Such ‘phantom legislations’ create a mere illusion of progress, but in reality, cannot have the intended outcome that they had projected. This continues to exclude the already small proportion of females employed in the formal sector and exacerbated the existing gap between both sexes, which the policy had set out to bridge.
Furthermore, provided with no choice, women are often pushed into the ‘mommy track’, accepting gendered roles while having access to only unequal career advancement opportunities. Discriminatory practices that are associated with the enactment of the amendment exemplify how a traditional patriarchal view of the division of labour among sexes has only exacerbated amongst employers.
It also threatens to disrupt the work-life balance of working mothers as they are forced to combat a glass ceiling that has been further lowered for them in public spheres by their employers and, indirectly, the state. It has been indicated that countries that exhibit higher levels of discrimination on the basis of gender within private spheres are less likely to fund such policies supporting women [SIGI, 2012]. It would be interesting to see in the upcoming months how the government seeks to collaborate with industries in establishing crèche facilities as well as working women hostels.
What about the women in unorganised sectors?
A question that has remained unanswered and demands attention is how the Bill can overlook about 85% of women workers in the unorganised sector.
The explicit exclusion of women employed in the informal sector, often the most adversely affected in the Indian economy, deprives a significant majority of women of holding an equal stake in each aspect of India’s socio-political and economic life. It raises important questions pertaining to their rights as working mothers in India, partaking in an important role in their children’s well-being, leaving them to fend for themselves.
Such exclusion of the majority of the female paid labour force has been linked with the perpetuation of intersectional inequalities across class, caste and gender. The monetary and non-monetary provisions, including crèche facilities, are restricted only to the formal sector of the country’s labour force, thereby leaving 52.7% of the total 287 million registered workers in the informal or unorganised sector.
This translates to approximately 151 million women working in India’s informal sector (eShram, 2022), a number exceeding the total population of certain countries such as Russia and Germany. The impact of such exclusionary policies and the country’s poor performance in this domain can be gauged from the World Economic Forum’s Global Gender Gap Report 2024, whereby India is in the fifth position in the regional category with countries Nepal and Bangladesh ranking relatively better. India is the fourth worst-performing nation in terms of disparities in economic participation among sexes.
This underscores a key lesson for NDA 3.0: when introducing means-tested reforms, it is crucial that the target demographic for entitlements is not subjected to further segmentation within that group. Such entitlements must cover all women in the labour force and be unconditional. The incorporation of all women warrants a gender budgetary planning that involves state, mixed tax-based or financial models that include employers and state, as well as employees paying a nominal price for a limited duration.
The way forward
Apart from fiscal arrangements, another pertinent policy vacuum observed under the MBA Act [2017] is the establishment of sufficient regulatory and compliance norms for the maintenance of crèche facilities. A study conducted by VVGNLI in Haryana, Maharashtra, Telangana and Karnataka reported that about 75% of IT sector organisations with 50 or more employees did not have any crèche facilities.
The lack of investment from the state results in a loss of quality infrastructural support. More practical challenges, such as transportation costs with children to workspace for women, unavailability of seats at nearby crèches (with some organisations reporting upto two years of waiting period), operational timings of crèches and working hours for mothers, etc., warrant a closer look before more reforms are enacted.
Furthermore, the non-inclusion of males in access to crèche facilities can lead to the enforcement of a ‘dual burden’ on working mothers and perpetuation of traditional division of labour, thereby adversely impacting gender equality both in households and workspaces.
Recognising caregiving work as an exclusive domain of females perpetuates the idea that they are solely responsible for it. Their exclusion from these debates is itself a form of discrimination that policymakers appear to be unaware of. Unless practical policy solutions are sought for these problems, the vision for an all-inclusive Amrit Kal would only remain an intent on paper and a myth for working women in India.
Ananya Kumari Singh read for an MPhil in South Asian Studies at the University of Oxford, and an MSc in Social Policy at the London School of Economics.
