Gender parity to boost India's economic growth: IMF

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New Delhi, Nov 15: Terming gender-gap in Indian job market as higher than most other countries, IMF today pitched for greater investment in infrastructure and enhanced social spending to bring in larger number of women in labour force.

As per a recent IMF study, India's GDP can expand by 27 per cent if the number of women workers increases to the same level as that of men. This is much higher than the positive impact a 50-50 gender parity in workforce can have on many other economies.

'Gender parity to boost India's growth'

"The study refers to the GDP gain that would materialise if the labour force participation gap between men and women is closed. This gender gap in labour force participation is much larger in India than in most other countries," said Kalpana Kochhar, Deputy Director of IMF's Asia and Pacific Department.

"Specifically, this gender gap is around 50 per cent in India, compared with an average gap of 12 per cent in OECD countries. Since the gap is much larger in India, the economic gain from closing it is much larger compared with other countries," Kochhar told PTI in an interview.

She further said that delivering such a large increase in women participation will require work along many dimensions, including increased labour market flexibility, greater investment in infrastructure, and enhanced social spending.

When asked about the potential benefits in terms of GDP growth that India can realise by removing the financial and employment exclusion on parameters like caste and religion, Kochhar said, "the IMF has not done any work on this issue beyond looking at gender gaps".

On G-20 pledge to reduce the gap in women's labour force participation by 25 per cent by 2025, she said it was a very positive step.

"Progress towards this goal will take time as it will require policy efforts along many dimensions. Policies to raise female participation in the labour force include revising tax codes to remove disincentives to work, providing high quality and affordable child care and well-designed parental leave policies.

"In developing economies, better infrastructure in rural areas and increased expenditure on the education of girls and women will help. More equal laws and reducing discrimination will also be needed to meet this goal," she added.

Kochhar recently co-authored a paper on 'Catalyst for Change: Empowering Women and Tackling Income Inequality' which also talks about cash transfers being conditional on sending daughters to school.

Asked to elaborate on this suggestion, Kochhar said, "Conditional cash transfers (CCTs) that are conditioned on activities that are socially and economically beneficial, generate positive outcomes.

"In particular, incentives to increase school attendance has been shown to improve labour market outcomes and the economy, as well as combat poverty."

However, such benefits have to be well designed and put in place in a manner to minimise leakages and the implementation of CCTs in India could be helped by the existence of the Aadhar program as well as introduction of the Jan Dhan Yojana.

"Both schemes can help prevent leakages from the schemes. As with any government expenditure, the appropriateness of this policy intervention depends on whether a country has fiscal space. For a country with limited fiscal space, such as India, such conditional cash transfers could be less wasteful than generalised or untargeted subsidies," she added.

The paper also talked about creating right infrastructure to encourage women participation in labour force. When asked what kind of push the private sector needs to give to achieve this objective, Kochhar said, "an IMF Working Paper that we wrote in March this year found that greater investment in infrastructure will lead to higher participation by women.

"We found that women living in states with greater access to roads and better availability of electricity are more likely to be in the labour force. Studies focused on Brazil arrive at a similar conclusion," she said.


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