Women’s work
&
FDI policy in India
Seventh Gender and Economic Policy Discussion
‘Politics and Economics of FDI through gender lens’
9th April 2013
Anandi Venkateswaran
Under Secretary (exports) Government of India
Disclaimer: The views expressed in the presentation are purely
that of the author and do not represent the views of the
Government of India
Policy options for Govt to increase Output/
Employment
Low
employme
nt
Low
investmen
t
Low supply
chain
infrastructure
Exchange rate
interventions to
stop rupee from
appreciating
Or Exchange rate
intervention- keep
rupee from
appreciating –
improve
exports/output
High
wastage
Improve
investment
Low
investmen
t /low
exports/hi
gh
imports/d
eficits
High cost
Monetary
policy-high
interest rates
High
inflation
Low
savings
What is FDI
World Bank
• foreign direct investment is
• acquisition of
• “a lasting management interest (10 percent or more
of the voting stock)
• in an enterprise operating in an economy other than
that of the investor.”
• Includes foreign equity inflows. Re-invested
earnings,other forms of capital(NRI investment)
Host country perspective
Investor perspective-What attracts FDI?
Market size-per-capita
income like retail
telecme
Good governance
FDI
attractiveness
Resourcescapital/labour/infras
tructure
Efficiency -Productivitywage differentials
Mfg, trade,transport
Mining,gas,power
FDI- A caution
Is mobile capital chasing immobile labour?
• FDI- neo-classical oppression of capitalists on bourgeois
• Ground rules- WTO rules on services restrict movement of
labour but supports foreign capital flows for members
• Indian scenario women’s labour is highly immobiletraditionally
• Solution- Marxist approach – labour contract is a ‘contested
exchange’-Wage -relative bargaining positions of labour and
capital.
• Highly mobile capital- pressure on immobile labour - seek
incentives subsidies, tax exemptions etc
• Solution lies in policies for FDI to compete fairly with
benefits both for consumers and workers-cheaper goods and
greater mobility
FDI flows into India
Total FDI Flows in USD Mn
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
Total FDI Flows in USD Mn
Share of top 10 investing countries FDI equity inflows
April 2000-Jan 2013
Germany
3%
France UAE
2% 2%
cyprus
4%
Netherlands
5%
USA
7%
Mauritius
45%
Japan
9%
UK
11%
Singapore
12%
Top five Indian destinations - FDI equity inflows
Jan 2013
cumulative inflows US$ mn
Mumbai
NCR
Bangalore
Chennai
Ahmedabad
7%
8%
8%
49%
28%
Top 10 sectors of cumulative FDI equity inflows into India Apr 2000-Jan 2013
FDI equity $
40000
35000
30000
25000
20000
15000
10000
5000
0
FDI equity $
Sectoral distribution of female
workers (UPSS)
%
2004-5
2009-10
primary sector
72.26
66.99
mining & quarrying
0.28
0.3
manufacturing
11.75
11.34
utilities
0.03
0.08
construction
1.89
5.11
trade.hotelling
4.14
4.55
tpt& communication
0.4
0.43
fianancing real
estate insurance
0.63
1.05
community,
social,personal
services
8.61
10.16
total
100
100
80
70
60
50
40
30
20
10
0
2004-5
2009-10
Elasticity of Employment to GDP
Sector
Estimated Elasticities
1977-78 to 1983
1983 to 1993-942/
1993-94 to 1999-00
1. Agriculture1/
0.45
0.50
0.00
2.Mining & Quarrying
0.80
0.69
0.00
3. Manufacturing
0.67
0.33
0.26
4.Electricity
0.73
0.52
0.00
5.Construction
1.00
1.00
1.00
6.Wholesale & Retail Trade
0.78
0.63
0.55
7.Transport, Storage &
Construction
8. Finance, Real Estate,
Insurance & Business
Services
9. Community, Social and
Personal Services
1.00
0.49
0.69
1.00
0.92
0.73
0.83
0.50
0.07
All Sectors
0.53
0.41
0.15
What typifies skill levels - Indian manufacturing
employment
• Highly dispersed skill levels-production lines
Highly skilled
/short
production chain
Semi-lowskilled longer
production
chain ( most
women
workers belong
here
• Over-lap of skills-defects accumulation
occupations with high women share of employment and
impact of FDI
occupation
Professional
technical
Services
Production
transport &
communication
occupations with high women share of employment and impact of FDI
% share of
FDI policy
route and caps
scope for women's work and policy needed to
women in
suit women's work
occupation
(2009-10)
26.4 Broadcasting- cable Upto – 49%Yes, good scope in urban areas due to high
networks DTH etc
automatic
employment in professional and technical
beyond that
occupations. Skill-sets to be added for rural
Govt route
women to benefit.
FM radio and uplinkin g of news
21.1 channels
Up-linking of Nonnews channels
Publication and
printing
Airport Ground
handling &
maintenance
Training /Flying
schools
33.5 Air transport
services, including
passengers
Upto 26%Government
route
same as above
100%-Govt route
26-100%-Govt
same as above
route
49100%/automatic
/govt route
100% automatic specialised training required. Scope for urban
elite educated women
49high presence of women airhostesses and
74%automatic
stewardess. However highly competitive sector beyond that
training in soft skills and supplementary skills to
govt route
switch job beyond retirement age needed
FDI allowed for
s.t regulations
40.9 MSE
and caps
Non-MSEs allowed - beyond 24%
in MSE productsGovt route
Also require
industrial licence
50% export
obligations as well
Pharmaceuticals
100%automatic/govt
6.3 Telecom services
same as above
4974%automatic
beyond that
govt route
highest presence of women.branding of MSE
products,CSR,skill development needed
Women in micro small enterprises would benefit
with export turnover which is mandated women
should seek ESOP to share profits
women working in chemical industries
possessed low levels of education as per 2004-5
study. Need to improve both education and skill
sets to derive benefits.Govt to play facilitative
role
low presence of women in transportation though
high in telecom services. Specific Skill
requirements must.
FDI policy where Sectoral share of female workers (UPSS) in 2009 is high
Industry
Specific sectors where FDI allowed and limits
Sectoral share
of female
workers(200910) UPSS%
66.99
Has FDI impacted women employment
positively in other countries and policy
support required
Agriculture,
hunting,
forestry &
fishing
Floriculture, Horticulture,
apiculture vegetable
cultivation, pisciculture
under controlled
conditions
And in agro& allied sectors
100% -automatic
Construction
Existing projects
Beyond 74%- govt
route
100%automatic
5.11
Lot of scope for women workers as it is a
low-skilled area. Decent work for
women to be ensured through
improvements skill development as
more prefabricated constructions. Scope
for urban women architects as well.
100% automatic
4.55
In multi-brand retail condition is that at
least 30% of the value of procurement of
manufactured/ processed
products shall be sourced from Indian
'small industries'
again cooperatives would help Move to
benefit rural and urban as retail outlets
to be set up in areas with minimum 10
lakh population.
States have leverage.
No e-commerce for multi-brand retailing
is also helpful.
Both rural and urban women in banking
services can benefit. ESOP participation
to be bargained.
Trade, hotels &
restaurants
Finance,
insurance, real
estate & busi
Constructiondevelopmenttownships,housing except
FDI in real estate business100% NRIs
Cash and carry including
Whole sale from MSMEs
e-commerce
Single-brand
Multi-brand retail
Private banking
Public sector banking
-do100% Govt route
51%-Govt
Upto 49%
automatic
49-74% govt route
Upto 20% with Govt
1.05
Yes,High positive impact –cooperative
farming, improves bargaining power
Women Co-operatives to seek better
prices, credit, sponsored contract
farming for women producers,
upskilling to support. Market extension
services. Pepsico for tomato puree.
Foreign companies presence in women-oriented
sectors
• Agro-based industry- India produces 50% of World's Mango, 19% of
Banana, 36% of Cashewnut , 38% of World's Cauliflower, 28% of Green
Peas (Coca-Cola, Pepsi,Britannia, Danone, Nestle, Cadbury, Lever's
Kellogg’s) -high rural presence can be capitalised by FDI.
Share of female workers in agri,
•
forestry,
horticulture
1993-94
2004-5
Urban
24.7
18.1
Rural
86.2
83.3
•
• Automobile industry-Audi, BMW Chevrolet DaimlerChrysler (Mercedes)
Fiat Ford General Motors, Hero Honda, Yamaha Motors, Hyundai Motors
• Construction industry:Emmar Properties, of Dubai UK-based construction
FDI in automobile industry-implications
• 73% of manufacturing employment
• Employs 17 mn people- direct and indirect(2012)
• auto-component more labour-intensive than the auto assembly segment.
• High imports auto-components from EU, Thailand, South
Korea, China
• W.e.f Jan 2013 import duties - components for ASEAN halved
to 5% from 10% -phased out by Dec 2013.
• 50% of components to be imported
• benefit consumers at the cost of domestic industry/workers..
• growth in emoluments lower than growth in labour
productivity. Need for skill-development.
Average growth in employment in automobile
sector
14
12
10
8
employment in mfr of automobiles except 2/3
wheelers
6
employment in mfr of auto components
4
2
0
2001-2 to 2003-4
-2
-4
2003-4 to 2004-5
total emoluments Rs.Cr
Growth in number of automobiles produced in
India
18,000,000
16,000,000
14,000,000
12,000,000
Passenger Vehicles
10,000,000
Commercial Vehicles
Three Wheelers
8,000,000
Two Wheelers
6,000,000
4,000,000
2,000,000
0
2008-09
2009-10
2010-11
2011-12
India’s Export Growth in automobiles ( nos)
2,500,000
2,000,000
1,500,000
Passenger Vehicles
Commercial Vehicles
Three Wheelers
1,000,000
Two Wheelers
500,000
0
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Trends in Skill requirement by 2022
employment 2008
•40
35
incremental HR reqts till
2022
CAGR 2008-22 %
40
35
30
30
25
20
15
25
20
15
10
5
0
10
5
0
CAGR 2008-22 %
Initiatives in skill development
• ‘Time lease’
Gujarat country’s first vocational
university.
• Skill vouchers Scheme Gujarat
• ‘Global Talent Track’ in partnership with ‘CISCO system INC’
and some 900 colleges across 15 states, tied up with the
University of Kashmir to train degree students with the job
skills that employers are looking for.
• The Prime Minister’s National Mission on Skill Development
targets training 500 mn skilled persons by 2022-
FDI in retail
Total retail
value (Share in
GDP)
Total
employment
Nos
Organised
retail
Value $ bn
2005
2011-12
2015
$225 bn(11%)
$470bn
$660 bn
200 mn
8
225 mn
27 (31%
clothing &
apparel and
home supplies
20-30%)
Implications on employmentBharti-Walmart
• Loss of unorganised low-skill jobs in short run and loss of selfemployment
• Women fruit and vegetable vendors most vulnerable-set to
suffer
• organised retail improves farm prices
• Low consumer prices compensate job loss -low inflation,
increased output,semi-skilled employment, tax collection for
economy
• Bharti-Walmart forcing farmers to be cost-competitive –FDI
make industry contestable
• non-exclusive partnership-revocable –Bajaj quit Kawasaki
Share of retail in female urban employment fell from 22.85% in
1999-00 to 16.63% in 2004, smaller fall in rural. Women’s share
in total retail employment also fell from 11.25% to 9.47%
(urban), smaller fall in rural – Walmart effect?
Agro-industry-women’s domain
• Set to curtail post-harvest losses
• Quality exports- SPS measures lower
• Scope for cheaper consumer prices through consolidation of
ghanis, chakkis, puffing units, mills,solvent-extraction plants
• supporting finance, infrastructure, credit facilities for agrobased industry
• impact women agricultural laborers more than farmers-study
on sugar industry, Maharashtra (Shejal2013)
• Boom in tertiary sectors in rural areas
• Women in fish processing, plantations,fruits, vegetables to
benefit
Recommendations-women skill development
•
•
•
•
•
•
•
•
•
Build India as a hub for skilled-womanpower
Specific skill-requirements of women in sectors:mfg:
Add ITIs dedicated for women
The Prime Minister’s National Mission on Skill Development targets
training 500 mn skilled persons by 2022Reverse causality
moderate skill-dispersion- Potential solutions
» increase semi-skilled workers with primary or secondary
education
• reforms in education and training policies, computer literacy
Agro-based industry:-training in quality, packaging, marketing export
promotion, brand management, finance, credit access etc
Utilise KVICs,DICs etc for skill development
Recommendations-FDI conditionalities
• job creation conditionalities - women inclusive
Head-exchange programs.
• prescribe export share-case of PEPSICO
• CSR conditionalities- safe and good conditions of
work – initiatives Tata Motors, IL&FS, Fiat India,
BhartiWalmart
Recommendations-legal issues
• Insist on movement of un-skilled workers under mode 4 of
GATS agreement
• Competition laws to rule out predatory pricing policies of
Foreign companies
• Labour laws
• Fiscal policies to tax profits, Taxation laws for tax havens like
Mauritius-improve revenue for social sectors
• Fiscal benefits to Foreign companies employing a stipulated %
of women
• Maintain FDI in muti-brand retail upto 50% only until review .
• Allow states to decide on caps and entry of FDI beyond the
minimum level depending upon local conditions and cultural
preferences
Other recommendations
• Allow FDI in labour- competing sectors of women
employment to enhance mobility of labour
• Brand promotion of ‘made-by- women’ products
• Seek waiver fee for Importer-Exporter Code numbers for
women
• Seek greater assistance under EXIM policy-focus schemes
• Lower threshold for status holders for women
• Women banks to fund agro-based industries
• Vulnerable unorganised women workers such as vendors to
be supported during transition to multi-brand retail
• Under the wings of demographic dividend Skilled worker
supply especially those of women, should be the business of
future for India.
Feedback
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