India, the world's most populous nation, has recently exhibited an extraordinary democratic process during the 2024 elections. Women in India now constitute a formidable voting bloc, drawing significant strategic attention from political parties. With a staggering 969 million eligible voters, including 471 million women, the nation has taken a significant stride towards gender parity. As many as 312 million women exercised their franchise, highlighting the transformative influence of "Nari Shakti."
The interim Union budget unveiled in February 2024 mirrors these societal shifts, aiming to harness women as economic assets by fostering greater participation in the workforce – an ongoing hurdle for India. It outlines various initiatives aimed at women, particularly facilitating their engagement in economic endeavours. These initiatives encompass disbursing approximately 30 crore Mudra loans, boosting female enrolment in higher education, and facilitating home ownership, especially in rural areas. Novel measures include bolstering the Lakhpati Didi objectives and future-oriented health endeavours, such as the pioneering cervical vaccination programme significant since India stands as the first nation to announce such a vaccine for cervical cancer for its female populace.
Recognising and integrating women's economic contributions into formal economic assessments is pivotal for a holistic comprehension of a nation's financial terrain. Women play a pivotal role in both formal and informal sectors, significantly augmenting productivity and economic expansion. By acknowledging and quantifying their economic engagements as also to ensure a balanced growth of the economy, policymakers can formulate tailored interventions that nurture an inclusive and dynamic economy. Empowering women at the grassroots level in particular where their economic presence is visible in the agriculture, manufacturing and informal sectors not only uplifts communities but also spawns a ripple effect, fostering sustainable development and societal advancement.
Over the past decade, the government has embarked on substantial endeavours to empower women and ensure their economic integration. Initiatives like Jandhan accounts and StandUp India have laid the groundwork for cultivating financial inclusion and resilience among women. Investment schemes such as Mahila Samman Patra and the Sukanya Scheme cater to specific needs, contributing to a more inclusive financial landscape. Additionally, the government has provided essential amenities directly to citizens through schemes like subsidised cooking gas, sanitation facilities, potable water and primary healthcare, thereby mitigating daily drudgeries somewhat.
In its third term, the Modi administration should intensify efforts to harness ‘Nari Shakti’ for development programmes spanning from grassroots initiatives to global endeavours, encompassing both social welfare and economic advancement. Women's healthcare should be elevated to a national priority, guaranteeing comprehensive and accessible health services nationwide. With the Union Budget slated for presentation in July 2024, some of the ideas to leverage women as change agents could include:
Enhanced Standard Deduction for Women Taxpayers up to a limit: Increase the standard deduction to provide more financial relief to women.
Asset Ownership: Offer higher tax incentives for women on interest deductions and a 0.25 per cent interest reduction on home loans where women are the primary owners.
Monetise Caregiving: Recognise caregiving responsibilities by subsidising childcare and making paid maternity leave tax-free.
Health and Workforce Participation: Provide tax deductions of up to Rs 50,000 per year for women's preventive healthcare expenses and health insurance.
Suggested measures for the Formal Sector:
Equal Pay Incentives: Offer tax incentives to companies that achieve or maintain gender pay equity, encouraging fair compensation practices (if the pay disparity between male and female talent in the same grade is more than five per cent). This would need any schemes launched to be tracked by filings with M.C.A
Training and Education: Tax breaks for employers investing in women's upskilling and reskilling. This has greater relevance since the presence of women in top echelons of the corporate ladder is few and far between,
Flexible Work Arrangements: Encourage businesses to implement flexible work policies through tax incentives, allowing women to balance work and family responsibilities more effectively.
Childcare Support: Provide tax deductions for childcare expenses to make it more affordable for women to work, while ensuring their children receive proper care
Family Leave Benefits: Tax benefits for companies providing paid family leave.
The Informal Sector:
Microfinance Incentives: Promote microfinance institutions by offering tax benefits to encourage the establishment and growth of women-owned businesses and self-employment opportunities. Use MFIN (SRO for MFI) to offer certification for such entities to be identified for tax incentives.
Skills Development: Provide direct personal income tax incentives for individuals, especially women, who engage in skill-building and vocational training programmes to enhance their employability. Allow them to carry forward those expenses for up to three years in their tax deduction.
Access to Credit: Offer tax deductions or reduced interest rates for loans and credit extended to women entrepreneurs, facilitating access to capital for small businesses. Offer tax incentives for women accessing education loans.
Market Access: Support initiatives that provide women in the informal sector with easier access to markets, potentially through tax incentives for women-led cooperatives or marketplaces.
Business Formalisation: Create tax incentives for informal businesses transitioning to the formal sector, making it easier for women to enter the formal economy with legal protections and benefits.
Improve women’s health & participation in workforce
Offer tax deductions from taxable income upto Rs 50,000 per year for women’s’ preventive healthcare’ expenses.
Allow for additional tax deductions of up to Rs 50,000 per year for women taking health insurance (Mediclaim as well as CI) policies.
The above suggestions which will boost the presence of women in the economic mainstream adding to the overall GDP. Budgets traditionally focus on expenditure proposals to support women but time had come to focus on tax-based proposals as well. Naysayers maintain that any tax relief has to be weighed against revenue foregone by the government. Our case is that tax incentives may initially be some revenue loss but in the long run, women will get integrated into the workforce and add to the overall productivity.
