Skip to main content

IMF study backs Modi, seeks labour market flexibility citing poor female participation rate

Counterview Desk
The world's powerful bankers, International Monetary Fund (IMF), have now backed the Government of India's "effort" to bring about a major change in the country's labour laws by removing the labour protection provisions, saying it would help reduce "gender gap in Indian labour force participation". In a recent policy paper, it says, increased "labour market flexibility" would lead to "more formal sector jobs, allowing more women, many of whom are working in the informal sector, to be employed in the formal sector."
Released this month, the paper, titled, "Women Workers in India: Why So Few Among So Many?", is authored by Sonali Das, Sonali Jain-Chandra, Kalpana Kochhar, and Naresh Kumar. It was released ahead of IMF managing-director Christine Lagarde's meeting on Prime Minister Narendra Modi on March 16. She called "India a bright spot in the cloudy global economy", and sought a major push in "reforms in subsidy, labour market and monetary policy."
The paper, based on calculations of data from the Government of India's National Sample Survey Organization up to 2011-12, stresses on the need in India for a better Employment Protection Legislation (EPL) index, which is based on a survey of labour market regulations, and is constructed by counting amendments to regulations that are expected to increase labour market flexibility.
It says, "The coefficient of 0.360 on the EPL variable implies that the probability of being in the labor force for women increases by about 3 percentage points when the EPL index increases from 0.5 to 1." It adds, however, "The coefficient on the EPL index is not statistically significant in the male labour force participation regressions, indicating that flexibility does not affect male participation as strongly as it does female participation."
The paper says, its study suggests "how labour market rigidities relate to labour force participation", and why India should implement policies that would lead to "implement to increase female participation." It blames India's "rigid" labour laws for having "one of the lowest female labor force participation (FLFP) rates "among emerging markets and developing countries."
The paper calculates, "At around 33 percent at the national level in 2012, India’s FLFP rate is well below the global average of around 50 percent and East Asia average of around 63 percent. India is the second-most populous country in the world with an estimated 1.26 billion persons at end-2014. Accordingly, a FLFP rate of 33 percent implies that only 125 million of the roughly 380 million working-age Indian females are seeking work or are currently employed."
Lack of labour law flexibility, the paper says, has let to a situation where "India’s gender gap in participation (between males and females) is the one of the widest among G-20 economies at 50 percent."
In fact, it says, "Female labour force participation has been on a declining trend in India, in contrast to most other regions, particularly since 2004/05", insisting, "Drawing more women into the labour force, along with other important structural reforms that could create more jobs, would be a source of future growth for India as it aims to reap the 'demographic dividend' from its large and youthful labor force."

Comments

Post a Comment

NOTE: Hateful, abusive comments won't be published. -- Editor

TRENDING

Sardar made up his mind on Pakistan in Dec 1946 "before" Mountbatten's Partition Plan

By Hari Desai* One has to be extra cautious while dealing with the history of towering personalities of the Indian freedom struggle, especially that of Sardar Vallabhbhai Patel (October 31, 1875 - December 15, 1950). Present-day politicians prefer to "pronounce” on his life and quote him according to their convenience like a blind person describing an elephant.
2 comments
»

The Guardian controversy and the moral question of 12 years of Modi's leadership

By Mohd Ziyauallah Khan    A recent opinion article published in The Guardian , titled "Can Narendra Modi Accept Any Medal?", reignited a fierce debate about Prime Minister Narendra Modi's international recognition and the moral legacy of his leadership. The article argued that while Modi has received numerous state honours and awards from foreign governments, a more fundamental question remains unanswered: Can a leader be celebrated internationally while presiding over growing concerns about democratic decline, social polarization , and civil liberties at home? The controversy quickly spread across political and media circles. Supporters dismissed the article as biased, while critics argued that it reflected concerns already expressed by international democracy watchdogs , human rights organizations, and sections of the global press. Yet beyond political loyalties lies a deeper question: How should the success of a government be measured, especially when it...
2 comments
»

Beyond the Ayodhya theft: A tainted system, a crisis of trust

By Martin Macwan*   Recently, the issue of "theft of offerings at the Ayodhya Ram temple" has taken centre stage on social media. Whether "no theft occurred," or "this is the first such incident," or "the theft was limited only to cash" are now secondary questions, because the evidence has come not from the opposition, from people of other faiths, or from foreigners, but from ordinary devout believers, from saints and monks, and from sincere workers of the ruling party itself.
Post a Comment
»