Strengthening Rural Prosperity and Women’s Workforce Participation

General Studies Paper -3

Context: The Union Budget 2025-26 aims to foster rural prosperity and resilience by increasing women’s workforce participation and supporting their entrepreneurial growth.

• This comes at a crucial time when self-employment among rural women is rising, as reflected in the Periodic Labour Force Survey (PLFS) 2023-24.

Rising Women’s Workforce Participation and Self-Employment Trends

• Periodic Labour Force Survey (PLFS) Data
• The female workforce participation rate has increased to 40.3% in 2023-24 from 22% in 2017-18.
• The rise is primarily due to a 15.9% growth in self-employment, particularly in rural areas.
• Self-Employment: A Double-Edged Sword
• While self-employment provides income opportunities, it is precarious and informal, lacking social security and job benefits.
• Key challenges include:
  • Lack of skill training
  • Limited mobility due to societal norms
  • Barriers in accessing formal credit
  • Heavy domestic and caregiving responsibilities

Contribution of Self-Employment to Economic Growth

• International Labour Organization (ILO) Study (2019) Findings
• Small enterprises and self-employment contribute to two-thirds of total employment globally.
• In India, self-employment among women is mostly concentrated in agriculture, but there is a growing presence in manufacturing, services, and construction, necessitating targeted policy interventions.
• World Bank Study (2024) on Rural Women Entrepreneurs
• Women-owned enterprises in rural India provide employment to 22-27 million people.
• Access to formal credit remains a significant challenge, highlighting the need for tailored financial inclusion strategies.

Budget 2025-26: Key Initiatives for Women Entrepreneurs and Workforce Participation

• Financial Inclusion Measures
• ₹41 lakh crore sanctioned under Pradhan Mantri Mudra Yojana (PMMY) in 2023-24 for women entrepreneurs.
• New scheme to support 5 lakh first-time entrepreneurs (women, SCs, and STs) with term loans up to ₹2 crore over five years.
• Increase in budgetary allocation for women’s welfare.
• Gender allocation in the total budget rose, showing greater commitment to women’s economic empowerment.
• Strengthening Self-Help Groups (SHGs) and Rural Livelihoods
• National Rural Livelihoods Mission (NRLM) has integrated rural women into SHGs.
• SHGs play a crucial role in microfinance, skill development, and entrepreneurship promotion.
• Skill Development and Capacity Building
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to provide job-oriented training to rural women.
• Emphasis on sectoral employment, particularly in:
  • Manufacturing
  • Micro, Small, and Medium Enterprises (MSMEs)
  • Services and construction industries

Sectoral Opportunities for Women’s Employment Growth

• Boost to Manufacturing and MSMEs
• MSMEs employ a significant number of women, and budgetary support for MSMEs is expected to:
  • Enhance women’s employment
  • Promote women-led start-ups
  • Provide easier access to credit and technology adoption
• The budget includes a special package covering financing, regulatory changes, and technology support for MSMEs.
• Support for Women in Labor-Intensive Sectors
• Focus on high-employment sectors like textiles, food processing, and rural industries.
• Policy measures to reduce informal employment and improve job security and social security coverage.

Addressing Barriers to Women’s Workforce Participation

• Overcoming Social and Economic Challenges
• Barriers include:
  • Unpaid care work and domestic responsibilities
  • Mobility constraints
  • Lack of digital and financial literacy
• Government Interventions:
  • Encouragement of working women hubs (MSMEs collaborating to provide hostels, crèches, and senior care facilities).
  • Promotion of gender-sensitive workplace policies in industries employing large numbers of women.
• Encouraging Financial Inclusion and Credit Access
• Formalizing credit access through women-led banks and financial cooperatives.
• Strengthening digital banking services for women entrepreneurs in rural areas.

Way Forward

• Expanding Social Security and Legislative Protections
• Extending social security benefits (pensions, maternity benefits, insurance) to self-employed women.
• Strengthening enforcement of equal pay and workplace safety laws.
• Strengthening Digital and Financial Literacy Programs
• Expanding digital literacy to ensure greater participation in online markets and e-commerce platforms.
• Bridging the gender gap in technology adoption through targeted training programs.
• Enhancing Rural Infrastructure for Women Workers
• Development of rural business hubs with access to:
  • Coworking spaces
  • Childcare and elderly care facilities
  • Transportation support for working women
• Long-Term Vision: Towards Sustainable Rural Employment
• Strengthening public-private partnerships (PPPs) for skill training and employment.
• Integrating women-led businesses into global supply chains.
• Encouraging eco-friendly entrepreneurship in agriculture, handicrafts, and textiles.

Conclusion

• The Union Budget 2025-26 lays a strong foundation for rural women’s economic empowerment by increasing their participation in self-employment and entrepreneurship.
• With a multi-pronged approach involving financial inclusion, skill development, and social security, India can harness the full potential of its female workforce.

These interventions align with the government’s vision of Viksit Bharat (Developed India) and contribute to sustainable, inclusive growth.