Labour

The Distressing Situation of Women Entrepreneurs in India

Data show that a majority of the enterprises are run by small proprietors and women hold only a negligible portion of that.

According to the Sixth Economic Census (2013) unit level data, the total number of enterprises engaged in different agricultural and non-agricultural activities in India – excluding crop production, plantation, public administration, defence and compulsory social security – was 58.5 million. Majority of these enterprises – over three quarters – were involved in different non-agricultural activities while retail trade and manufacturing were dominant among them as both of these together constituted 58% of the total non-agricultural enterprises.

These non-agricultural enterprises further provided employment to 108.41 million persons – but among them, only 33.04 million (25%) were women.

It was also observed that most of these enterprises were operated under private ownership and within this, ‘own account establishment’ (i.e. establishment without any hired worker) were foremost. Further, over the period 2005 to 2013, growth of own account establishment was higher relative to the growth of enterprises with hired workers.

But gender disaggregated data provided a disquieting picture because only 8.05 million establishments were run by women entrepreneurs without any hired workers and they were majorly involved in livestock rearing, agricultural and manufacturing industries.

Also read: Where Are Indian Women If Not in the Workforce?

The NSS 73rd round unit level data (July 2015-June 2016), which excluded construction and conducted surveys on all un-incorporated non-agricultural enterprises, estimated the total number of enterprises as 63.4 million and they provided employment to approximately 111.3 million workers. The own account enterprises (OAEs) or the proprietary enterprises accounted for 62% of the workforce and workers in the OAEs outnumbered those engaged by big enterprises in the country.

So, both the economic census and the NSSO round indicated that in India, the majority of the enterprises were run by the small proprietors and women hold only a negligible portion of that.

Types of ownership

The types of ownership can provide further useful insights into understanding the operational and economic characteristics of the enterprises in India. It showed that proprietary enterprises (i.e. enterprises wholly owned by a single individual without any hired help) had the highest share (96%) among the non-agricultural enterprises in 2015-16.

A gender disaggregated data revealed that at the all-India level, nearly one-fifth of the enterprises were run by female entrepreneurs but their concentration was mainly restricted to proprietary enterprises. Among the bigger enterprises (i.e. establishments) women’s share was very low (4-5% only).

It is also interesting to note that apart from agriculture majority, women entrepreneurs (45%) were also involved in the manufacturing industry while their share was lower in trade and other services in 2015-16.

Further, these household-based proprietors were dominantly informal enterprises as their nature of the operation was seasonal depending on the availability of raw materials and demand for the products/services they produced. Most of these enterprises (88%) did not have a proper infrastructural set up as they either operated from within the household or outside it without any fixed structure.

However, women entrepreneurs were largely operating from within the household while men had lower chances of operating inside the house. In addition, while running enterprises, a significant number of women entrepreneurs faced various operational issues, among them shrinkage/fall of demand was one of the biggest challenges in both rural and urban areas.

Availability of basic infrastructure 

In terms of the availability of basic infrastructural facilities like toilet and waste management within the enterprises, a gender disaggregated division of enterprises reveal that women-owned enterprises are at a further disadvantageous position relative to their male counterparts. Only 23% of women proprietors had access to toilet facilities in their enterprises – 18% of the women who owned enterprises did not have any solid waste management and only 10% had provision for liquid waste management.

Across the enterprises, most of the own account enterprises (98%) did not use computers and only 20% of the big enterprises (i.e. establishments) used a computer for their operation purposes. Similarly, in terms of internet use, only 5% of the total enterprises used it and proprietary enterprises further had lower chances of using internet facilities in 2015-16.

A strict gendered division was also noticed in terms of use of any digital technologies. It is not to deny that for the smooth running of any enterprise, bank account or post office savings account is a compulsory necessity, but in India, 40% of enterprises did not have any bank account/ post office savings account and more than half of the women proprietors did not hold any one of these two. This indicates lower financial inclusion of women entrepreneurs and suggests that most of these enterprises are overwhelmingly dependent on cash.

The recently released Periodic Labour Force Survey (2017-18) further confirms the distressing situation of women entrepreneurs. The report highlights that in spite of the decline in self-employment between 2011-12 and 2017-18, it is the major form of employment for both genders in rural areas.

Also read: What Does the Periodic Labour Force Survey Tell Us?

Self-employment

Within self-employment, while rural men predominantly work as own account workers and employers, among 58% of self-employed women, only 19% are entrepreneurs and rest are unpaid family labourers, helping the household in agriculture and animal husbandry activities in rural areas.

In urban areas, apart from the regular employment – which employs approximately 52% of the women workforce – 35% of women are self-employed and the majority of them are own account workers and employers working in manufacturing and retail trade industry in 2017-18. However, this picture may be misleading, as recording them as directors or working proprietors may create a false impression about their true nature of work. This is because a large proportion of women proprietors are engaged in outsourced manufacturing work (mainly food processing, textile and garment manufacturing) and family-owned retail trade (like local grocery stores).

The document released by NITI Aayog, ‘Strategy for New India @75’, proposes to increase women’s employment by encouraging entrepreneurship among them. However, since women comprise a heterogeneous group and have different requirements, we need to identify policies that assess entrepreneurship from a much broader and diverse framework. Moreover, women’s entrepreneurship in India needs to be looked in the larger context of women’s employment and we need to develop holistic macroeconomic strategies to address this.

Shiney Chakraborty is affiliated to Institute of Social Studies Trust, New Delhi.