The much-awaited amendments to the Maternity Benefit Act in 2017 came as a welcome relief to women looking to balance their work and life while at the same time pursue their careers. The bill that was passed in March 2017 and received an assent from the President of India in the same month, protects the employment of women by providing them with a 26-week paid break from work to look after their newborn. It also provides them with child support so that they can smoothly transition back into work.
There have, however, been conflicting viewpoints on the potential impact of these amendments. A survey conducted by TeamLease Services Pvt Ltd estimates that 1.1 million to 1.8 million women will lose their jobs across 10 sectors till March 2019 on account of the law. This is also in line with the data analysis that the share of women in the workforce has shrunk to around 24 percent as compared to a 36 percent a decade earlier.
What, however, needs to be ascertained is the definition of the women workforce and the sectors that it takes into account. A recent study that uses data gathered from successive rounds of the National Sample Survey Organization and census data states that while the share of women has indeed come down, it can be attributed to many factors that can attempt to understand this puzzling drop in the women force. For one, the largest drop has been seen in the villages of India where now more and more girls and women aged 15- 24 are opting to continue their education rather than join the workforce. Also with improved financial stability arising in the family due to an increase in the income of the male workforce, women in rural India are opting out of paid labor and are instead engaging themselves in work around their homes.
Coming back to the Maternity Bill and whether it will have an adverse effect on the employment of women, SMEs and startups do argue that the cost of retaining women by paying for their 26-week leave goes way beyond their budgets. This argument, however, does not hold true for women in highly skilled jobs which amount to a large percentage of the workforce in the organized sector. Studies also go on to indicate that the financial cost of retaining an employee through her maternity leave is far less than those of training a new one all over again.
Also, the intangible benefits of having a gender-balanced workforce far outweigh the costs and only go to support McKinsey and Company's estimate that more than $700 billion could be added to the country’s gross domestic product by 2025 if more women were in jobs. Managing Director of the International Monetary Fund, Christine Lagarde said in a speech at Davos earlier this year that “if women were brought to the same level as men in terms of economic and workforce participation, then India’s GDP can go up by 27 percent.”
In a world where most companies are trying to provide their employees with an environment of nurturing growth and gender diversity, this progressive maternity law encourages women to look forward to getting back to work with increased productivity and greater employer connectivity. Companies that positively accept the amendment can position themselves in a far more favorable light and use this as a selling point when it comes to building a branch image and loyalty. This could, in turn, be used while getting into a talented and dedicated workforce of women. Prime Minister of Japan, Shinzo Abe under his tenure adopted the strategy of increasing the female labor force participation rate (LFPR) by 5 percent by providing mothers returning to work with an environment conducive to balancing their work and life.
The amendment, albeit a great step towards bridging the gender gap, has also brought with it a lot of underlying apprehensions in the minds of employers and loose ends that need to be tied up. Having said that, for any law to get completely absorbed into the system it takes time and in India Inc's case, one hopes it is only a precursor to what shall eventually become a norm in HR policies across the industry.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of People Matters.