Vol. XLII No. 06 February 11, 2018

Women Workers Get a Bad Deal in the Union Budget

Archana Prasad

IN his Preface to the Economic Survey, 2017-18, Arvind Subramanian, the chief economic adviser to the ministry of finance wrote “The (pink) color of this year's survey cover was chosen as a symbol of support for the growing movement to end violence against women, which spans continents. Addressing the deep societal meta-preference in favour of sons, and empowering women with education and reproductive and economic agency are critical challenges for the Indian economy”. Coming a day before the last full union budget of the Modi-led NDA government, it was hoped that the union budget would show some sensitivity to the genuine and real concerns of the women workers who constitute a large proportion of the workers in informal employment and whose concerns have been voiced by women’s organisations in the last few decades. However, this was not to be – though the finance minister announced a series of measures in the name of women workers; the hollowness of his claims lies in the fact that the budget addressed none of the ‘real concerns’ of women workers.


One of the major highlights of this year’s budget proposal has been its so-called focus on “job creation” in the formal sector. The finance minister claims that women will be the main beneficiaries of job creation and announced a series of measures that would incentivise employers to employ women in the formal sector. Some of these measures revolve around the extension of paid maternity care from 12 weeks to 26 weeks and an amendment to the Employees Provident Fund (EPF) Act in order to reduce women employees from 10-12 per cent to 8 per cent (there by implying that the government would give a subsidy of 2-4 per cent). The finance minister has also claimed that the government will pay a contribution of 8.33 per cent of Employee Provident Fund (EPF) for new employees for the next three years and a contribution of 12 per cent in the textile, leather and footwear sectors. Of these three sectors, there are considerable numbers of women workers in the textiles and footwear sectors.

Quite apart from the fact that there are virtually no allocations to back up these tall claims, the budget blissfully ignores the fact that more that about 84.8 per cent of the female work force is either self employed or does casual work as per the government’s own estimate for 2015.  Hence only 14.2 per cent of the women workers work in either salaried jobs or contract work which are going to be impacted by these proposals even if the budget is actually allocated for this purpose in the future. This constitutes about 4 per cent of the entire female population of the country.

Hence the hype around the proposed EPF and maternity entitlement proposals are just a mirage for obfuscating the main issues that confront women workers, most of whom work in the informal sector. Democratic women’s organisations have been demanding that women in informal employment be recognised as ‘workers’ through a process of registration with the labour ministry. This will enable them to access medical, provident fund, pension and other benefits. It is only through such a process that the most vulnerable sections of women workers will get some social security. This is not even acknowledged by the current finance minister who seems to suggest that creation of self employment by financing small entrepreneurs through MUDRA loans is the solution to the problem of job creation.


One of the big successes advertised in the budget is the support that it is going to provide to micro, medium and small scale enterprises (MSME). In his budget speech the minister states that this sector will create employment and the engine of its growth will be the micro units development and refinance agency (MUDRA Yojana). He states that 76 per cent of these micro units belong to women and thus it can be a source of great ‘women empowerment’. This conclusion seems to be based on a study of a private consultancy agency (SKOCH) which claims that 55 million new jobs have been created by the scheme. This erroneous assessment is based on the understanding that being in ‘self employment’ constitutes a ‘decent job’. This assessment can be contested by the fact that the average loan disbursed to one beneficiary was about Rs 44,000 for 2016-17 and new enterprises got an average loan of Rs 70,000. As a recent study notes, no one can be employed with the average size of loan given under the scheme. In the case of women too, about two third of the non-agricultural and about half the agricultural enterprises are single person owned and run establishments that are sustained through unpaid family labour. Workers working under such conditions of employment are termed as ‘vulnerable workers’ who have no ‘decent working conditions’. The current government’s policy is to further accentuate this situation rather than provide opportunities for gainful employment.

Within this context we may ask: what does the government hope to achieve by projecting such an unsustainable path of job creation? The answer to this question is evident in annexure one of the budget speech where the target is to set up 21 supply chains and link them with startup village enterprises through 9 lakh village self help groups through the National Rural Livelihood Mission. It is clear that private financial resources will be mobilised through the MUDRA yojana to finance a large part of this programme. It is important to understand that MUDRA bank is a mechanism to channelise private financial resources into rural development. Apart from public sector and schedule commercial banks, micro-finance institutions contribute more than 40 per cent of the loans disbursed through this scheme in 2016-17. A micro finance company gets financed through the MUDRA bank and then lends to poor women borrowers. The interest rates charged by the companies range from 20 to 33 per cent per annum. The same MUDRA loan can be accessed from public sector banks at an interest rate of 11-13.75 per cent. However the small allocations for financing schemes like MUDRA shows that the measures taken by it are designed to integrate women workers with oppressive private micro finance institutions.

The measures being proposed by the government in the current budget also show that women workers are going to find themselves in a more vulnerable situation than ever before. Therefore the democratic movement will have to keep tracking and documenting the impact of these measures in order to expose the real intention of the government and also organise women against these neoliberal structural changes.