Women's Day can only be worthy if they are financially independent.


Women's Day 8th March 2022

Every year on March 8th, International Women's Day gives us a lot to be happy about. At the same time, it provides us with even more fodder for thought. Despite the gradual gains made over the decades, economic well-being and financial independence remain distant dreams for Indian women, as these have been continually hampered by structural and societal barriers. As we celebrate women's achievements, here's a status check to remind us why slow progress isn't enough:


1) While Indian women are making headlines in leadership roles, their labor-force participation is unusually low by global standards. Only a dozen countries perform worse. Despite improved education and opportunities, Indian women's labor-force participation has steadily declined over the last three decades. This was fueled by the rural sector, where participation has nearly halved.


Conservative norms dictate that instead of going to work, women should shoulder the burden of unpaid household labour. According to a 2019 Time Use Survey, women spend seven hours per day on such work, while men spend 2.9 hours. It's no surprise that the pandemic disproportionately affected female workers.


A policy aimed at relieving women of such responsibilities could be beneficial. Nikore sees solutions in the formalisation of affordable care services and the resolution of infrastructure issues such as safe mobility.


2) Women are also grossly underrepresented in corporate leadership positions at the highest levels. According to a Mint analysis, women make up 9.6 percent of non-independent executive directors in India's listed companies, up from 5.4 percent in 2014. Progress has been too slow for a time when there has been an increase in demand for parity. Banking and finance, fast-moving consumer goods, and healthcare account for nearly one-fourth of the gains. The disparity in pay is also significant. Women at lower rungs earn 2.2% less than men, but the deficit rises to 6.1% at executive levels.


3) The bias also work against enterprising women who try to rise on their own. Despite the fact that more women-led startups reached $1 billion in valuation in 2021 than ever before, according to VCCEdge data, less than 15% of India's unicorns are led by women.


According to a 2019 report by the International Finance Corporation, women-led firms receive only 7% of total private equity and venture capital funds in emerging markets. According to US research, VCs with female partners are twice as likely to invest in companies with gender-diverse management. "But there are so few of in positions of leadership, making investment decisions.


4) Women's financial inclusion can play an important role in economic empowerment, and this has increased in recent years. According to Reserve Bank of India, the share of women among individual borrowers increased to 34.7 percent in September 2021 from 27.5 percent five years ago, while their share of total loan amount increased to 22.4 percent from 19.5 percent.


The main drivers of growth have been credit primarily given to women at subsidised rates under the Pradhan Mantri Awas Yojana and an increasing share of microfinance in credit, where the main customers are women-led groups. In general, female borrowers have a much higher propensity to save and a much higher willingness to repay loans.


Regardless of these developments, more progress must be made to achieve greater financial equality and women's inclusion.


5) On the up side, more women are now venturing into the stock market, which has traditionally been dominated by men. Female participation in capital markets has increased, with analysts estimating that women now account for nearly 25-30% of the trading tribe. According to ICICI Securities data, the number of new female investors has more than doubled every year since 2019, with smaller cities leading the way. Younger women (aged 25-35) are driving investment trends, as the pandemic has accelerated investors' shift to stock markets.


"In the long run, women are more patient and risk-averse than men and can become excellent investors," says Vijay Chandok, managing director at ICICI Securities. According to analysts, as women gain financial independence, they will direct their savings and investments into the market. The government can help by providing incentives, but the market ecosystem must raise awareness.


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