A recent publication from the State Bank of India has just claimed that India’s informal economy has sharply declined from 52.4% in 2017/8 to between 15 and 20% in 2020-2. We can see a formalisation of the informal economy in India, especially through digitalisation and the emergence of the new gig market. The Indian economy is already very precarious with 80 million people living under the poverty line. Furthermore, India has an extremely low female workforce. So, what does this reduction of India’s informal economy mean for female labourers in India?
An informal economy is part of the economy that is not registered by the government and therefore not taxed or monitored in any form. This clearly can be a source of worry for a government, especially as it cannot be controlled and can easily manipulate its workers. The emergence of a gig market could potentially be a solution as it secures workers’ rights. However, whilst the formalisation of India’s economy does seem to be a positive result, we have to ask ourselves if anyone is becoming exploited over this. Would employers rather simply lay off their workers than have to pay tax?
The female workforce in India is already extremely low: only 20.3% of the workforce in 2019 according to The World Bank. Whilst it has stabilised over recent years, the percentage of women in the workforce drastically fell after 2005. This already demonstrates the precarity of women in the workforce. Of more important note are the results of the pandemic. The female labour participation rate fell to 16.1% in September 2020. Moreover, the economic crisis in India is far from over, with a slow vaccination rate and a reduced consumer demand. Most of the female workforce is in low-skilled work, such as factory and domestic help, which have been particularly affected by the pandemic. Therefore, it is evident that the pandemic has worsened already tense female equality in the world of work.
Surprisingly, the informal economy was a source of income for most families during the pandemic and fared better than expected. However, the types of jobs that were saved in the pandemic were those primarily dominated by men such as transportation and food delivery services. Furthermore, with the majority of schools being shut because of the pandemic, women were forced into childcare and unable to work. This inequality is shown by the fact that 47% of women who lost their job because of the pandemic were made permanently redundant, compared to only 7% of men.
This is also a social problem. We need to address the fact that 75.3% of Indian women are not seeking any full-time employment. India is one of the countries which places the most domestic burdens on women, and they are expected to do all the social duties. This, coupled with a low female education rate makes it nearly impossible for a woman to consider finding work. However, 67.8% of women did state that they would be interested in finding a part-time work position. Therefore, the emergence of the gig economy in India does suggest some help for women, but the social expectations will continue to pose difficulties for women.
India’s incredibly low female workforce is already a cause for concern that has been even worse affected as a result of the pandemic. Moreover, the formalization of the economy can continue to make it harder for a woman to find a job. Of greatest concern however is the mentality that a woman in India should not work, making her even more financially dependent and vulnerable. This continues to aggravate a woman’s inequality in India.