The Union budget for 2025-26 promises rural prosperity and resilience through greater participation of women in the workforce and a boost for their entrepreneurial opportunities. This is a timely intervention, particularly during a period when self-employment by rural women has been rising.
The workforce participation of women has increased from 22 percent in 2017-18 to 40.3 percent in 2023-24, says the Periodic Labour Force Survey. This increase is mostly attributed to a 15.9 percent rise in self-employment, particularly in rural areas where self-employment jumped from 57.6 percent in 2017-18 to 73.5 percent during 2023-24. ‘Self-employment’ is precarious and remains an integral part of the informal economy. However, the challenge is to extend social security and legislative cover to this large chunk of the population. The other challenges include lack of skills and training, domestic and care-giving responsibilities, barriers in mobility, lack of access to finance and societal norms.
A study conducted by the International Labour Organization in 2019, titled ‘Small Matters: Global evidence on the contribution to employment by self-employed, micro enterprises and SMEs’, revealed that around two-thirds of total employment is provided by small enterprises or through self-employment. The share of self-employment to total employment is highest in South Asia, Africa and West Asia. But, the challenge lies with the quality of self-employment in countries like India. Though rural workforce for women is mostly driven by agriculture and self-employment, their location in sectors like manufacturing, services and construction requires special attention for targeted policy intervention.
The budget announcement opens up a plethora of opportunities for effective sectoral intervention. A World Bank study in 2024, titled ‘Giving a boost to rural women entrepreneurs’, states that though women-owned enterprises in rural India provide employment to around 22-27 million people, they have several challenges in accessing formal credit that requires tailored policy interventions for growth.
The government has undertaken several initiatives to address these challenges through schemes like Pradhan Mantri Mudra Yojana (PMMY), providing training through the Pradhan Mantri Kaushal Vikas Yojana, etc. The PMMY launched in 2015 is a flagship programme of the PM aimed at funding micro enterprises and small businesses. During 2023-24, `5.41 lakh crore was sanctioned to 6.68 crore loan accounts that provided financial support to women entrepreneurs. Under the National Rural Livelihoods Mission, approximately 9 crore women are connected with around 83 lakh self-help groups that are transforming the rural socio-economic landscape in several innovative ways.
Budget 2024-25 promotes first-time entrepreneurs with the announcement of launching a new scheme for 5 lakh women, scheduled castes and scheduled tribes by providing them term loans up to `2 crore during the next five years. An interesting aspect of the budget has been the thrust on promoting employment and entrepreneurship for women in labour-intensive sectors that can address the challenges associated with women’s location in sectoral employment.
It promises greater opportunities for women as there has been an enhancement in budgetary allocation from `3.27 lakh crore towards welfare of women and girls in the previous year to `4.49 lakh crore. The gender allocation in the total budget increased from 6.8 percent during 2024-25 to 8.86 percent . With increasing self-employment amongst women, such initiatives have immense potential to promote women’s entrepreneurship.
With the manufacturing sector and Micro, Small and Medium Enterprises (MSMEs) receiving special attention in the budget, women’s employment in these sectors can be enhanced to a large extent. The boosting of the manufacturing sector, which happens to employ a considerable number of women, can be significant in improving the quality of women’s employment within the rural employment scenario. The budget also includes a package covering financing, regulatory changes and technology support for MSMEs to help them grow.
Apart from these interventions, there is a need to address women’s challenges associated with unpaid care work for their sustained participation in the workforce through promotion of care infrastructure in rural areas. The Ministry of Labour and Employment in January 2024 released an advisory for employers that recognised the need for creating ‘working women hubs’ to be set up by MSMEs in collaboration with each other to build working women hostels, creches and senior care facilities. The promotion of MSMEs in the budget can be utilised towards creating working women hubs. The budget has a plethora of opportunities for women workers through enhanced economic participation in the direction towards realisation of the goals of Viksit Bharat.
(Views are personal)
(ellinasroy.vvgnli@gov.in)
Ellina Samantroy | Fellow and Coordinator, Centre for Gender and Labour, V V Giri National Labour Institute