Empowering Women Entrepreneurs in India through Industrial Land Rights

Visiting Professionals Women's Land Rights Network

Empowering Women Entrepreneurs in India through Industrial Land Rights

Allocating shares of industrial land for women is smart economics

By Kanta Singh

According to the McKinsey Global Institute, closing the gender gap in the economic realm in India could add at least US $700 billion to the GDP by 2025 – an increase of 18 percent.  The potential gains go beyond providing a boost to the national economy and growth rate.  Enhancing economic opportunity for women is also critical to reducing feminized poverty, augmenting inclusive growth, and enhancing the welfare of their children.

Despite these potential gains from bridging the gender gap in Indian economic activity, the Economic Survey of India for 2017-18 indicates that the labour market is seeing a continuing drop in numbers of women workers. Those who stay on, work in low-paying jobs without social benefits and face larger wage differentials. This trend continues despite record height in female literacy and graduation rates and it reinforces the importance of understanding gender-based disadvantages as a complex, systemic challenge entrenched deeply not only at community levels but also within larger political and economic institutions. Women bear the burden of jobless growth in India, especially as the number of men ready to join the workforce continues to increase.

Closing India’s gender gap in economic activity will involve providing more assistance and opportunities to women seeking employment. However, it cannot stop there. Women have massive potential to be job seekers as well as job creators.  Though formal employment numbers are dropping, more women are showing an interest in owning their own businesses. A recent Facebook study suggests that four out of five women in India aspire to become entrepreneurs. According to the study, bringing more women into the entrepreneurial fold in India has the potential to create as many as 16 million businesses and 64 million jobs by the end of 2021. As of now, only 14% of business establishments in India are being run by women entrepreneurs (National Sample Survey Organization), less than half of the global average of 37%. The data also reveals that most of these women-run companies in India are small-scale, with around 79% being self-financed ventures.

If women entrepreneurs in India are to meet their substantial potential for creating jobs and boosting economic growth, they must be able to gain benefits from fair and equal property laws. International organizations like the United Nations repeatedly stress upon the importance of women’s land and property rights through historic initiatives such as the Beijing Platform for Action, the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the Millennium Development Goals (MDGs) and the current Sustainable Development Goals (SDGs).

In addition to the socio-cultural barriers women entrepreneurs face, they lack access to funds, collateral to secure credit, valuable networks, mentorship, advisors and most importantly, information. Enabling more women entrepreneurs to flourish and graduate from small/micro to medium/large businesses requires addressing underlying policy and regulatory constraints related to women’s share in industrial land, skills, and access to credit. To achieve this, women and men must be provided equal access to land and other economic resources as well as business support to conceptualize, formalize and expand their businesses.

Broadening women entrepreneur’s access to land may appear to be the steepest challenge, but the government appears to have options in its arsenal. Though women have achieved equal rights to familial property in India, a majority are coerced (through direct or indirect means) into relinquishing this right on account of socio-cultural reasons. This appears to reduce the scope for public institutions to intervene, other than creating awareness on the rights and entitlements.

The current government, however, is focusing on programs such as ‘Make in India’, ‘Start Up India’ and ‘Skill India’, and herein lie new opportunities to increase women’s access and rights to industrial land that is either sold by the government directly to entrepreneurs and companies or is acquired by the government for private sector use. Since the distribution or sale of this land is governed by policies and not by customary inheritance practices, it should be relatively easy to engender them by engaging the right stakeholders.

India’s central and state governments have multiple options for enhancing women’s ownership of industrial plots.  These include:

  1. New women-only industrial parks (100% of units owned by women): States such as Uttarakhand, Telangana (see here, here, and here), Andhra Pradesh (see here, here and here), Gujarat and Karnataka have already been promoting this concept with much success. Fully-functional women-friendly business ecosystems now exist in these states, where thousands of women have started buying land to start operations, either in manufacturing or services.

 

  1. Allotting a percentage of plots in existing parks and zones: Another approach is to allocate a certain ratio of the overall area for women entrepreneurs in existing Special Economic Zones (SEZs) and Integrated Model Townships (IMTs) on lower per unit costs. This will encourage more men to buy plots in the name of their women family members or women to buy plots on their own. The impact of this approach has already been seen in the form of increased house ownership by women after the government introduced reduced registration charges for women buyers.

 

  1. Private sector partnerships: Several companies either have or can be encouraged to formulate corporate policies to encourage female entrepreneurship within their supply chain and business model. The relevant governments could also allot land to private sector entities for promotion of private women-specific industrial parks on a PPP model.

 

  1. Collective-based allocation: Smaller plots could be preferentially given on ownership or lease to first-time women entrepreneurs for conducting group or community-based economic activities.

The growth impact of such measures could be easily monitored and measured in terms of increases in the number of skilled women entrepreneurs, their enhanced share in family income, jobs created, actual realization of property rights, and reduced gender gaps in the manufacturing sector. Pursuing these options would utilize the latent potential of women entrepreneurs in creating jobs and contributing to inclusive growth.  As IMF has stated, ‘empowering women is smart economics.’ What are the Indian central and state governments waiting for?

Kanta Singh is State Project Head of UNDP India and a member of the Visiting Professionals Women’s Land Rights Network.