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

Manufacturing, services: India's low-skill, middle-skill labour remains underemployed

By Francis Kuriakose* The Indian economy was in a state of deceleration well before Covid-19 made its impact in early 2020. This can be inferred from the declining trends of four important macroeconomic variables that indicate the health of the economy in the last quarter of 2019.

Incarceration of Prof Saibaba 'revives' the question: What is crime, who is criminal?

By Kunal Pant* In 2016, a Supreme Court Judge asked the state of Maharashtra, “Do you want to extract a pound of flesh?” The statement was directed against the state for contesting the bail plea of Delhi University Professor GN Saibaba. Saibaba was arrested in 2014, a justification for which was to prevent him from committing what the police called “anti-national activities.”

Food security? Gujarat govt puts more than 5 lakh ration cards in the 'silent' category

By Pankti Jog* A new statistical report uploaded by the Gujarat government on the national food security portal shows that ensuring food security for the marginalized community is still not a priority of the state. The statistical report, uploaded on December 24, highlights many weaknesses in implementing the National Food Security Act (NFSA) in state.

Why Indo-Pak relations have been on 'knife’s edge' , hostilities may remain for long

By Utkarsh Bajpai* The past few decades have seen strides being made in all aspects of life – from sticks and stones to weaponry. The extreme case of this phenomenon has been nuclear weapons. The menace caused by nuclear weapons in the past is unforgettable. Images of Hiroshima and Nagasaki from 1945 come to mind, after the United States dropped two atomic bombs on the cities.

Modi’s Israel visit strengthened Pakistan’s hand in US–Iran truce: Ex-Indian diplomat

By Jag Jivan M. K. Bhadrakumar , a career diplomat with three decades of service in postings across the former Soviet Union, Pakistan, Iran, Afghanistan, South Korea, Sri Lanka, Germany, and Turkey, has warned that the current truce in the US–Iran war is “fragile and ridden with contradictions.” Writing in his blog India Punchline , Bhadrakumar argues that while Pakistan has emerged as a surprising broker of dialogue, the durability of the ceasefire remains uncertain.

The soundtrack of resistance: How 'Sada Sada Ya Nabi' is fueling the Iran war

By Syed Ali Mujtaba* The Persian track “ Sada Sada Ya Nabi ye ” by Hossein Sotoodeh has taken the world by storm. This viral media has cut across linguistic barriers to achieve cult status, reaching over 10 million views. The electrifying music and passionate rendition by the Iranian singer have resonated across the globe, particularly as the high-intensity military conflict involving Iran entered its second month in March 2026.

Lata Mangeshkar, a Dalit from Devdasi family, 'refused to sing a song' about Ambedkar

By Pramod Ranjan* An artist is known and respected for her art. But she is equally, or even more so known and respected for her social concerns. An artist's social concerns or in other words, her worldview, give a direction and purpose to her art. History remembers only such artists whose social concerns are deep, reasoned and of durable importance. Lata Mangeshkar (28 September 1929 – 6 February 2022) was a celebrated playback singer of the Hindi film industry. She was the uncrowned queen of Indian music for over seven decades. Her popularity was unmatched. Her songs were heard and admired not only in India but also in Pakistan, Bangladesh and many other South Asian countries. In this article, we will focus on her social concerns. Lata lived for 92 long years. Music ran in her blood. Her father also belonged to the world of music. Her two sisters, Asha Bhonsle and Usha Mangeshkar, are well-known singers. Lata might have been born in Indore but the blood of a famous Devdasi family...

'Batteries now cheap enough for solar to meet India's 90% demand': Expert quotes Ember study

By A Representative Shankar Sharma, Power & Climate Policy Analyst, has urged India’s top policymakers to reconsider the financial and ecological implications of the country’s energy transition strategy in light of recent global developments. In a letter dated April 10, 2026, addressed to the Union Ministers of Finance, Power, New & Renewable Energy, Environment, Forest & Climate Change, and the Vice Chair of NITI Aayog, with a copy to the Prime Minister, Sharma highlighted concerns over India’s ambitious plans for coal gasification and the Prototype Fast Breeder Reactor (PFBR).

Labour unrest in Manesar trigger tensions: Recently enacted labour codes blamed

By A Representative A civil rights coalition has expressed concern over recent developments in the industrial hub of Manesar in Haryana, where a series of labour actions and police responses have drawn attention. A statement, released by the Campaign Against State Repression (CASR), said it stood in solidarity with workers in IMT Manesar and other parts of the country, while also alleging instances of police excess during ongoing unrest.

Search This Blog