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

TRENDING

India under Modi among top 10 autocratizing nations, on verge of 'losing' democracy status

By Rajiv Shah
A new report, prepared by a top Swedish institute studying liberal democracy, has observed that there has been a sharp “dive in press freedom along with increasing repression of civil society in India associated with the current Hindu-nationalist regime of Prime Minister Narendra Modi.” The report places India among the top 10 countries that “have autocratized the most”. Other countries that have been identified for rolling towards autocracy are -- Hungary, Turkey, Poland, Serbia, Brazil, Mali, Thailand, Nicaragua and Zambia.

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam*
RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Border conflict? RBI nod India's 'brotherly' help to China internationalise its currency

By Bhabani Shankar Nayak*
In the middle of a global pandemic, China started an unprovoked border conflict with India. It unraveled trust deficit and ties between the two neighbours. As thousands of Chinese troops tried occupying Indian territory, the Narendra Modi-led BJP government directs the Reserve Bank of India (RBI) to allow the Bank of China to start regular banking services in India. The Bank of China will now operate in India like any other commercial banks.

Gujarat link of controversial US doctor who 'forced' WHO quiz Trump's wonder drug

By Rajiv Shah
A top American doctor, Sapan Sharankishor Desai, born and raised in the “affluent” North Shore (Chicago) region of Illinois by Indian parents, at one point of time involved in NGO activity through  dedicated to “improving” the lives of the impoverished in Gujarat, is in the eyes of a major international storm following his paper (retracted) in a “Lancet” questioning Donald Trump-promoted drug hydroxychloroquine.

RSS supremo Deoras 'supported' Emergency, but Indira, Sanjay Gandhi 'didn't respond'

By Shamsul Islam*
National Emergency was imposed on the country by then Prime Minister Indira Gandhi on June 25-26, 1975, and it lasted for 19 months. This period is considered as ''dark times' for Indian democratic polity. Indira Gandhi claimed that due to Jaiprakash Narayan's call to the armed forces to disobey the 'illegal' orders of Congress rulers had created a situation of anarchy and there was danger to the existence of Indian Republic so there was no alternative but to impose Emergency under article 352 of the Constitution.

Clean chit to British rulers, Muslim League? Karnataka to have Veer Savarkar flyovers

By Shamsul Islam*
The BJP government of Karnataka led by BS Yediyurappa is going to honour Hindutva icon VD Savarkar by naming two of the newly built major flyovers in Bangalore and Mangalore after him. There was a huge uproar against this decision of the RSS-BJP government as many pro-Kannada organisations with opposition parties and liberal-secular organizations questioned the logic to ignore so many freedom fighters, social reformers and others from within the state.

Hurried nod to Western Ghat projects: 16 lakh Goans' water security 'jeopardised'

Counterview Desk
Taking strong exception to "virtual clearances" to eco-sensitive projects in the Western Ghats, the National Alliance of People’s Movements (NAPM) in a statement has said urged for a review of the four-lane highway, 400 KV transmission line and double tracking of the railway line through the Bhagwan Mahavir Wildlife Sanctuary and Mollem National Park in Goa.

Disturbing signal? Reliance 'shifting focus' away from Indian petrochemical sector

By NS Venkataraman*
Reliance Industries Ltd (RIL), a large Indian company, has expanded and grown in a spectacular manner during the last few decades, like of which no industrial group in India has performed before. RIL is now involved in multi various activities relating to petroleum refineries, petrochemicals, oil and gas exploration, coal bed methane, life sciences, retail business, communication network, (Jio platform) media/entertainment etc.

Letter to friends, mentors: Coming together of class, communal, corona viruses 'scary'

By Prof (Dr) Mansee Bal Bhargava*
COVID greetings from Ahmedabad to dear mentors and friends from around the world…
I hope you are keeping well and taking care of yourself besides caring for the people around you. I’m writing to learn how is the science and the society coping with the prevention and cure of the pandemic. I’m also writing to share the state of the corona virus that is further complicated with the long-standing class and communal viruses.