June 27, 2018:

A new law to improve the Maternity Benefits for women in India’s workforce and encourage them to further their careers is likely to have the opposite effect, according to a Survey.

Law, which makes India, most progressive country after Canada and Norway in enabling women to stay on in workforce, will probably lead to job losses and discourage smaller businesses and start-ups from hiring women, the survey by TeamLease Services Ltd. stated on Tuesday.

An estimated 1.1 million to 1.8 million women will lose their jobs across 10 sectors in the financial year to March 2019 because of the law,.

If this estimate is computed across all the sectors, job loss number would be an estimated 10-12 million across all sectors, according to the survey by the staffing and human resources company.

That is the bad news for a country where share of women in the workforce has shrunk to around 24 per cent in fiscal year ended 2016 from 36 per cent a decade earlier.

McKinsey and Co. estimates more than $700 billion could be added to country’s GDP by 2025 if more women were in jobs.

Rituparna Chakraborty, Co-Founder of TeamLease Services stated that,"India probably cannot be compared to most other countries simply because we have one of the lowest workforce participation rates in the world", adding that the financial incentives were needed to attract more women.

She further added that,"One could take a leaf from the UK mechanism where women employees have the option of taking up to 52 weeks of maternity benefit. However the burden of paying the employee for 52 weeks doesn’t rest entirely on the employing organisation."

Survey was conducted among 300 employers across sectors like aviation, information technology and IT-enabled services, real estate, education, e-commerce, manufacturing, banking and financial services, as well as retail and tourism.

It showed that while large and professionally managed companies will back reform measure, which is fully funded by the employer, small and medium sized companies would resist hiring women as they find the costs prohibitive.

PM Narendra Modi’s Government introduced the law that entitles women working in organized sector to have 26 weeks paid maternity leave, up from 12 weeks.

Post-maternity retention could cost 80 per cent to 90 per cent of Annual salary for the white collar employees, and up to 135 per cent of annual salary for blue-collar employees.

Source Business Standard

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