The entrepreneurship wave in India has provided an impetus to individuals to compete and expand business horizons globally. Increasingly, women entrepreneurs are riding the wave and are making a significant impact in this new world. The representation of women, however, continues to be less than optimal.
The All India Report of Sixth Economic Census shows that the total number of establishments owned by women entrepreneurs in India was merely 8.05 million (i.e. 13.76%). While some ground has been covered for women entrepreneurship in India, a lot is still left to be achieved. Let’s take a look at the key challenges faced by the women entrepreneurs and their expectations from the government in the Union Budget 2023:
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Unconscious gender bias continues to plague the development of women entrepreneur ventures. Inadequate availability of funding by PE investors is triggered by unjustified perceptions of weak creditworthiness and ability to run successful businesses. Whilst the government has introduced various funding opportunities for women which includes Bharatiya Mahila Bank Business Loan, Dena Shakti Scheme, Udyogini Scheme etc., the funding is modestly capped, which does not provide financial liberty for scalable business models.
To address the concerns of women, government can bring in following reforms in Budget 2023:
- Increase the monetary cap for funding under the existing schemes;
- Include women run businesses in the eligible list for priority sector lending;
- Provide tax reliefs or subsidies to the women entrepreneurs to encourage the growth of women led ventures;
- Introduce interest subvention schemes for women entrepreneurs; etc.
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Education and awareness programs
The government had introduced NITI Aayog, which runs on 7 principles of effective governance, which includes, inter alia empowerment of women and promoting equality. It has also started an initiative of Women Entrepreneurship Platform (WEP) that brings together women entrepreneurs and sponsors willing to support them.
To provide further stimulus, the government can introduce additional skill development and education centres for training aspiring women entrepreneurs that shall captivate and provide a break-through to such entrepreneurs for building a better and more progressive economic nation.
This shall also open avenues to interact with who’s who in their area of interests, which shall bring in various dimensions to reform, transform and perform – which also coincides with the Governance reforms introduced by the government of India.
Responsibility can be cast on private players for women upskilling and training, by incorporating it as a part of CSR initiative, to emphasise the significance of providing opportunities to women, and stimulate and foster a sense of inclusion amongst women to ensure their rightful share of contribution to India’s growth story.
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Appointment of women as board of directors
The current law mandates appointment of at least 1 woman director on the board of public companies. The law is not sufficient as a single woman director on an otherwise male board may not make a real dent in the structure. Further, it may also make a single woman director discomfited to express her uninfluenced vote amongst the male dominated board room.
The government should consider substituting the words ‘at least one’ to a percentage of the Board strength or 1, whichever is higher.
Further, for ease of convenience of the Companies and women entrepreneurs, an interactive website can also be developed wherein the eligible women entrepreneurs (based on qualification and experience) seeking for directorship can register. Such platforms can also provide ease of convenience to the Companies to welcome women directors on board, as per the job fit.
As per the extant provisions, a person can hold up to 20 directorships, of which, the maximum limit for directorship in a public company is capped at 10. Considering the limited strength of the women entrepreneurs so far, such a cap of 10 directorships in a public company should be increased to 20, which shall increase the opportunities for women to expand their horizons.
In order to tap the potential of women across the nation, the government may consider introducing special tax incentives to corporations providing employment to a minimum prescribed percentage of women in the total workforce. This shall act as a catalyst to proliferate women employment in India, thereby promoting the workforce diversity and gender equality.
Tax incentives can also be given to the employers implementing special skilling programmes for women employees, crèche facilities, extended benefits of maternity leave etc.
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Social Security benefit
While the government has introduced various social security welfare schemes, a scheme can also be introduced for women entrepreneurs providing assured pension (at a lower premium), that shall give a financial comfort to women entrepreneurs akin to the rural social security scheme.
Additionally, there should be job protection provisions in the labour laws for women going on maternity leave on the lines of European practices.
The Mastercard Index of Women Entrepreneurs 2021 results shows that women in some Asian economies, including India, continue to lag their global peers in their ability to advance professionally as business leaders, professionals or technicians.
Although multiple government reforms have been introduced over the years to boost and upscale women entrepreneurs, there is still a long journey ahead. It is expected that Union Budget 2023 will provide additional opportunities for women to promote an inclusive work culture.
Riaz Thingna – Partner, Grant Thornton Bharat. This article is written with inputs from CA Nilpa Gosrani and CA Disha Mehta.