The Maharashtra state assembly election results handed a thumping victory to the Bharatiya Janata Party-led coalition government that ruled the state. The introduction of the ‘Ladki Bahin Yojana’ (Favourite Sister Scheme) handed Rs 1,500 per month dole to women who earn less than R2,50,000 per annum. It was introduced a few months before the announcement of the assembly elections. The opposition parties promised twice as much, and the ruling party promised to enhance the dole to R2,100 if they won. If the government keeps the promise, women will get more money.
A survey of the top five districts where the scheme received maximum response found a bump in women voter turnout, media reports said in a post-poll analysis. Most of the seats in those districts were won by the candidates of the ruling dispensation.
Financial markets loathe competitive socialism. They want efficient use of government money. Investors do not like the government spending on subsidies or giveaways. However, the situation in India demands steps like these to enhance the participation of women in the workforce. The lack of participation of women in the workforce hurts India’s economy. Any support to women to become financially independent should be welcomed without any debate.
A new working paper published by the International Monetary Fund surveyed over 200,000 women in India to understand the impact of violence against women on the economy. A study for Nagpur in Maharashtra found that the average household loses the equivalent of almost two weeks’ income per occurrence of domestic violence. In the long-term, economic growth suffers from lower human capital formation and diversion of investment from the much-needed physical infrastructure to health, judicial and social services.
The survey quotes the National Family Health Survey (2019-21) that approximately 1 in 3 women in India experienced physical, sexual, or emotional domestic violence. “This rate is higher than in many other countries in the Asian and Pacific region and worldwide. At the same time, India’s rate of female labour force participation is lower than in most counties,” the survey states.
The survey recommends support for women from the government and the education of men and women to find skilled employment. It also asks the Indian government to be mindful of the fact that the incidences of domestic violence increase if the woman earns more than the man in the household. Such incidences are higher among poor households than the well-off.
The government should encourage financial independence among women as part of the institutional mechanism to support women. A culture of investing through retirement and financial planning must be a government priority. Besides launching investor awareness and education programmes, financial advisors could be given incentives to help women income earners plan and invest regularly.
Households should be given tax incentives if they invest in the name of women or the girl child.
As India moves towards a defined contribution-led retirement plan, awareness programmes for women should get additional support from investor education funds.
If you are a working woman, you must engage a professional to help you with financial planning. A lot of women happily let others in the family manage their money. They open joint bank accounts for the convenience of operation.
However, having another bank account that only you can operate may be a good idea. We know of those days when the government announced the demonetisation of R500 and R1000 notes, and many middle-class women were found stuck with an undisclosed stash in the cupboard. Even if you are managing the household budget, you must learn to use modern saving and investment techniques. Sign up for an online course that teaches the basics of savings and investments. You do not have to be a finance expert to manage your money.
If you are new to the wonderland of investment, index funds or exchange-traded funds are the best way to get started. If you are risk-averse, you can choose multi-asset funds like hybrid funds to earn a better return than fixed deposits or merely stash cash in the cupboard.
Rajas Kelkar
(The author is editor-in-chief at www.moneyminute.in)