Maximising Lakshmi: Modi sarkar understands that to economically empower women is to strengthen the economy

At the ET Global Business Summit (GBS) last week, Prime Minister Narendra Modi reminded his audience how his government has delivered welfare worth Rs 28 lakh crore in cash transfers since 2014. That works out to 40% more than what GoI expects its share of tax revenue to be in 2022-23. Transfer payments of such magnitude can be attempted only when there is a degree of certainty that they will reach intended beneficiaries. Fixing leaks in the welfare delivery pipeline using population-wide biometric data and high tele-density was among the Modi government’s first priorities. It has reengineered — reimagined, going by this year’s GBS theme — India’s chronic failure to redistribute income.

This success has had one particular fortunate spinoff. Since the intended welfare beneficiary is more likely to be a woman than a man, cash transfers have by themselves narrowed India’s gender divide. This is apart from women-centric welfare schemes, such as clean cooking fuel and toilets, designed to improve their score in human development. Gender-agnostic universal health insurance and rural employment guarantee also tilt welfare in favour of women, who find themselves excluded from social security provided to the workforce on account of low participation.

India is closing the gender gap faster under this government with maternal mortality, adolescent fertility, school enrolment, labour force engagement and political participation posting improvements. Gender development is also keeping pace with increases in life expectancy and years spent in school, while the relatively static female per-capita income is a debatable metric with what India regards as a narrow definition limiting work to market-driven activity.

The Modi government’s piloting efforts to guarantee a minimum income are also bridging the gender gap faster than the rest of the world. It has also made a serious dent in poverty eradication. India’s economic performance has been one of the highlights of the post-pandemic world, while debt distress builds up among its similarly ranked neighbours, affecting their ability to fund their development agenda.

This also poses a dilemma for GoI, which intends to spend upwards of Rs 13 lakh crore in 2023-24 on capital expenditure to keep India growing at its current rate of 6.5% or above in the medium term. Social sector spending has been growing faster than overall governmentexpenditure. But the outsized allocations in successive budgets to building physical infrastructure are crowding out health and education outlays. In the budget for the next fiscal year, apart from affordable housing, allocations for most centrally sponsored schemes have been enhanced modestly, while subsidies have been rationalised following a spike in fuel and fertiliser prices.

Social indicators vary widely across the country, and state governments have been increasingly vocal about seeking autonomy in spending. The Centre, on its part, wants better outcomes, and has instituted a monitoring mechanism to plug leakage that is delivering financial savings. Such savings could, however, come at the cost of lower state capacity to implement social development.

Gender parity indicators like reproductive health, education, labour force participation and political empowerment are critically dependent on local and regional factors that shape the development agenda. GoI is concentrating on lagging districts — Modi reminding the gathered at GBS of his administration turning earlier ‘backward’ districts into ‘aspirational’ ones. But it cannot offer a prescription for accelerating growth in states, which has the broadest impact on human development. Addressing infrastructure deficits and creating a common market helps. Yet, the states themselves need to put in place individual growth strategies based on their resource endowments.

True, India has a long climb ahead in gender equality. Political empowerment is being followed up with improvements in welfare delivery. Social infrastructure has scope for rapid transformation that could close the gap faster. Livelihood prospects need to be enhanced vastly for a more equitable participation in the workforce.

GoI is testing some out-of-the-box approaches by offering incentives for women to be healthy, educated and gainfully employed. One of these, as the prime minister pointed out in his GBS keynote speech, is the special savings certificate for women announced in the latest budget. More such ideas are needed to level the income and wealth differential with men. The economic fortunes of India are tightly bound to the economic empowerment of India’s women. This is something the Modi government keenly recognises.