Women Entrepreneurship in India: Government Efforts & Challenges

16 min readJul 5, 2021

Introduction

In India, women constitute about 48.1% of the population, however only 20.3% of women aged 15 and older participate in the labour force as of 2020, (compared to 76.0% of men) (World Bank, 2020). Some valid reasons for women’s low participation in the workforce include restrictive cultural norms regarding women’s work, the gender wage gap, an increase in time spent for women continuing their education, and a lack of safety policies and flexible and supportive work offerings. Due to such factors and many more, women have been left behind.

Even though the government has taken a number of measures to improve the social parameters, India’s growth has unfortunately not translated into economic inclusion and development of women. Rather, women’s participation in the labour force has stagnated and is expected to decline further because of labour trends, technological disruption, constraining social barriers, as well as the stagnation and high unemployment rates for women exacerbated by the Covid-19 pandemic. Studies are further showing that rural women are leaving India’s workforce at a faster rate than urban women.

In the coming decade, India will have the largest working-age population in the world with over 1 billion people. This demographic dividend, when combined with an increasingly educated population, has the potential to transform India’s economic and social development. However, to achieve this goal towards sustainable development of the country, India needs an educated and empowered women workforce that has the potential to add $770 billion to India’s GDP by 2025(ILO), ensuring women and girls from rural and semi-urban areas are not left behind.

As a large part of the population in India lives in rural and semi-urban settings, for the country to create faster and wider socio-economic growth, there is a greater need for focussing on the promotion of women’s empowerment especially to mitigate the reversal of progress made so far caused by the pandemic. When we educate and empower one woman, we set off a chain reaction that transforms the life of her family and the community she lives in. Studies show that women in emerging markets plough back 90 cents of every additional dollar of income into “human resources”, which includes their families’ education, health, and nutrition (compared to 30–40% for men), thereby helping their families, communities, and nations. Therefore, the advancement of women’s education and entrepreneurship can play a significant role in the same, attuned with a multipronged approach and multi-stakeholder contribution for ensuring its success.

This article, therefore, dwells on the need for prioritising women’s empowerment through the means of women entrepreneurship in rural and semi-urban areas, along with analysing the key challenges faced by women entrepreneurs as well as understanding the gaps in government policies and schemes. This note also analyses the important role of the central government in realising this unprecedented goal for sustainable development of the nation, leaving no women or girls behind.

Challenge

While women’s participation in the labour workforce has been low, it is characterised as mostly unpaid, informal and unprotected. Women are not well represented in most sectors, including in leadership positions in businesses. Though women are said to comprise almost 31% of agricultural labour, they control only 9% of the land in India. Nearly half of women in India do not have a bank or savings account for their own use and 60% of women have no valuable assets to their name. Women in India are also victims of crimes of physical and sexual nature. As per the 2011 Census of India, only 53.7% of women in India are said to have some level of literacy.

The sixth economic census, released by the Ministry of Statistics and Program Implementation shows that only 65% of women are said to work in non-agricultural sectors( as there is a need to encourage women entrepreneurship in farming and non-framing sectors). Among the states, the largest share in a number of establishments under women entrepreneurship is of Tamil Nadu (13.51%) followed by Kerala (11.35%), Andhra Pradesh (10.56%), West Bengal (10.33%) and Maharashtra (8.25%)

While the factors stated above have contributed to the financial exclusion of women in the country, below are some reasons which bar women from achieving their highest potential in performing and showing their entrepreneurial capabilities in micro-enterprises or home-based enterprises include:

lack of access to support networks
issues relating to gender bias, cultural acceptance, patriarchal perceptions
lack of basic education or training
lack of technical skills and knowledge about business
lack of market knowledge (making them vulnerable to exploitation by market forces)
lack of access to finance and funds
lack of financial literacy
limited access to resources
focus on household chores and unpaid care work for family and children  high costs of production 
lack of knowledge on marketing and product development  lack of motivation 
complex legal formalities 
limited managerial ability 
lack of entrepreneurial ability 
lack of confidence and self-doubt 
limited agency or voice 
being solo entrepreneurs 
lack of safety at the workplace

Government Policies and Schemes

Since independence, India has adopted a planned approach to development. Five-year plans were the fundamental plans outlaying targets and mechanisms to achieve development and growth. Each Five-year plan had a specific approach and target for the women population. Key trends visible in the Five-year plans are:

From the first Five year plan (1951–56) to the fifth Five year plan period (1974–78), the prime focus of plans and policies was the welfare of women.
From the sixth Five year plan (1980–85), the focus shifted to the development of women. The emphasis on development continued up to the seventh Five-year plan (1985–90). 
Empowerment of women took centre stage from the eighth Five-year plan (1992–97) onwards and is evident till the last Five-year plan (2012–17).

Since women entrepreneurship is highly concentrated in Micro, Small and Medium Enterprises, the government has dedicated schemes and programs for women entrepreneurs in the sector. According to the Annual Report of the Ministry of MSME released in 2015–16, the following major schemes and programs exist for women entrepreneurs:

TREAD (Trade Related Entrepreneurship Assistance and Development): This scheme is aimed at the economic empowerment of women through nurturing entrepreneurship among women. This scheme specifically focuses on promoting non-farm activities.
Mahila Coir Yojana was aimed at providing self employment in rural women artisans in coir producing regions. This scheme entails providing training and subsidized equipments and machinery.
Prime Minister’s Employment Generation Program is aimed at promoting opportunities for gainful self-employment. Assistance in the form of margin money subsidy and credit relaxation for women is provided 0.95 per cent of the project cost is borne by governments while 5 per cent is contributed by women entrepreneurs.
Cluster development scheme: This scheme is aimed at providing infrastructural support to women entrepreneurs. Only 20 per cent of the project cost is borne by women entrepreneurs while 80 per cent is borne by the government of India.
Entrepreneurship Development Programs for women: This program is targeted at providing training to women beneficiaries.
The government of India promotes women entrepreneurs to represent themselves in International and national trade fairs and exhibitions through a hundred per cent reimbursement of travelling costs. Ministry of Women and Child Development (MWCD) acts as a nodal agency for executing and monitoring programs and schemes related to the empowerment and welfare of women.

In 2016, the Ministry of Women and Child Welfare brought out the draft National Policy for Women which envisaged that all-important micro-level policies needed to be engendered and mainstreamed to address women’s concern for being an equal partner in the country’s development. The draft includes a large number of policy statements, for raising the visibility of women in the economy, which inter-alia includes entrepreneurship development, training and skill up gradation, support to women farmers in their livelihood etc. MWCD has been working to remove all impediments for women to become successful entrepreneurs and to create a conducive environment for providing support in different areas, where they have been facing difficulties due to explicit reasons e.g. access to finance, access to the latest skills and technology, access to market and business skills.

According to the Annual report of the Ministry of Women and Child Development, 2016–17 major programs and schemes for women entrepreneurs are:

Rashtriya Mahila Kosh provides financial, capacity building and marketing support to enterprising women belonging to poor economic backgrounds.
E- Haat was launched in March 2016 to address the marketing constraint faced by women entrepreneurs. It is a digital marketing platform connecting women entrepreneurs to markets.
Support for Training and Empowerment of women (STEP) is aimed at providing women with training and skill development to make them capable of pursuing self-employment or entrepreneurship.
Nari Shakti Puraskar scheme is aimed at felicitating people and organizations working for the empowerment of women.
Working Women’s Hostel scheme provides safe and affordable accommodation to working women along with a crèche facility for their children. 
Economic Empowerment of Women Entrepreneurs and Start-ups — To encourage women entrepreneurship within the country, Ministry of Skill Development and Entrepreneurship (MSDE) implements the project named ‘Economic Empowerment of Women Entrepreneurs and Start-ups by Women’. The project navigates incubation and acceleration programmes for women microentrepreneurs to start new businesses and scale up existing enterprises. 
Rural Self Employment and Training Institutes — Government has introduced selfemployment and training facilities for rural entrepreneurship development. Under the Ministry of Rural Development, skill development is being imparted through Rural Self Employment and Training Institutes (RSETIs). It’s is a Bank-led initiative, enabling a trainee to take bank credit and start their own micro-enterprise. 
Women Entrepreneurship Platform — The Women Entrepreneurship Platform (WEP) of NITI Aayog was launched on March 8, 2018 on the occasion of the International Women’s Day as NITI Aayog’s flagship initiative. WEP has pan India coverage and does not have state-specific programmes. Registration on the portal and all subsequent services are provided free of cost for WEP users. WEP caters to both aspiring and well-established women in the space of entrepreneurship.

Additionally, the Government of India has also made provisions for providing credit and financial assistance to women entrepreneurs through public sector banks. Public sector banks provide financial assistance to women entrepreneurs for venture and working capital requirements. The schemes providing financial assistance to women entrepreneurs stipulate flexible norms for lending.

Gaps/Challenges in Policies and Schemes

Despite the fact that the government has framed and implemented various supportive measures, women entrepreneurship in India remains alarmingly low. Below could be some challenges in the success of these policies and programmes. Please note as there is no/ hardly any data available in the public domain on the effectiveness of the policies related to women entrepreneurship or plausible gaps in them, the following gaps have been assumed keeping in mind the government ecosystem and practices observed:

Many policies may be gender-neutral and very few policies are specifically for women entrepreneurs. 
The majority of the women-owned establishments are concentrated in unregistered, informal and home-based work sectors and hence are unable to reap the benefits of government support. Therefore, it is imperative that the policies and schemes cater to the unique needs of every segment and promote the inclusion of the informal workers in their schemes in both farm and non-farm activities and promote opportunities for formalising of work and businesses carried out by women. 
As most of rural and semi-urban women lack education and legal and financial literacy, it is important to simplify the legal framework and create an enabling environment for women to thrive and survive in their entrepreneurial journey. As there are a number of policies and schemes introduced by the government of India, there are high chances of women not understanding the benefits of such schemes, the eligibility criterias as well as ways to access them and make the correct choice as per their unique situation amongst the array of schemes available to them. 
As these policies and programmes also have been developed by both Central and State governments and given the low conversion rate of women entering the business world, the effective implementation and simplification of ownership of such schemes and policies for lay women can be questioned. 
The budgetary allocation to each of these policies and the subsequent expenditure of the same needs to be further studied and advocated for, to understand the effectiveness of such policies as well as the key challenges in its implementation.
The sustainability of the impact of such schemes and programs also need to be studied and questioned to ensure women workers and entrepreneurs are able to sustain their businesses beyond government support. 
Many of such policies also do not define the important role that other stakeholders can play in the success of these policies including the role of businesses, civil society and other individuals, leaving a big gap and scope for multi-stakeholder involvement in the same. This has led to all the different groups working in silos and non-coordinated or integrated manner. 
Lack of coordination amongst Ministries as well as State and Central government and lack of integration of policies can also contribute to the failure of the implementation of the policies and programmes. 
The absence of an effective accountability body for monitoring and impact assessment of the workings of these policies and programmes have also contributed to the lack of data and research available on the effectiveness of governments’ efforts for women entrepreneurship in India. 
Many of the policies and schemes promoting women entrepreneurship may also be said to lack or be low on supporting the unpaid care work taken by women for caring for the family and carrying out household chores, which women may give priority to over their business. 
Many policies and programmes may also not cater to reducing/ eliminating gender based violence at workplace/ home, gender based discrimination as well as patriarchal views of women’s role in society, hence creating barriers for women’s participation in work and entrepreneurship. 
Policies may also lack the element of community led enterprises which may show a higher rate of successes given the whole/ part community maybe involved in the same including women, men and youth ( provided effective training and behavioural change exercise is taken place)  Many policies and tax rebates and other benefits given to them can also said to find its basis on gender stereotypes on the type of work that women can/ should do, for example limiting them to stereotypical work of papad making, beautician courses, handicraft, stitching etc, while not making adequate space and opportunity for women to enter technical and other types of business fields. 
There is a high chance of duplicity of schemes and programmes initiated by Central and State governments running a risk of confusion for aspiring women entrepreneurs.

Advocacy Call to Action towards the Government

To ensure women entrepreneurship is promoted for all women in India especially rural and semi-urban, a radical change in the policy framework as well as in the stakeholder contribution is needed.

For women entrepreneurship to thrive and be adopted and adapted by women of rural and semiurban areas, the following call to action for the government at the policy level can be advocated for : 

Both and central and state governments need to create an integrated gender-responsive policy framework for accelerating entrepreneurship amongst women with an increased focus on the inclusion of women and girls from rural and semiurban areas. 
Create tailored women and girl-friendly policies for different kinds and sizes of enterprises with the embedment of sustained support on eliminating socio-economic cultural barriers for women’s participation in work such as gender sensitisation, financial literacy, marketing and business management etc. 
Both governments need to form an effective coordination and accountability system amongst departments and Ministries to implement and monitor the impact, reach, challenges and effectiveness of the programme. 
The policy must also clearly define the role of multi-stakeholders including civil society, NGOs, trade unions, banks and financial institutions, private sector, community-led organisations and Self- Help groups to share the financial as well as the non-financial role of supporting the women entrepreneurship programmes and its activities. 
The policy must also ensure optimum and adequate budgetary allocation at all levels including budgets for the district and block level government officers to support the programmes. 
The policy must also find linkages with other national and state policies related to women, gender as well as trade and entrepreneurship/ business promotion.

Other advocacy asks/ call to action involving governments and other stakeholders: 

Widening the scope of institutional support beyond government to key banking and financial institutions, NGOs, community-led organisations, business etc. for various needs including training, capacity building, financial literacy, access to funds etc. 
Provide access to customised training, mentoring and counselling on marketing, business management, product development, quality maintenance, access to market etc 
Sound financial support for every policy, scheme and programme and access to simple and easy loans and funds 
Awareness-raising of women’s rights and harnessing capabilities through access to schemes and policies 
Removing socio-cultural-economic barriers for women 
Focussed vocational, skill and entrepreneurship development training programme for women 
Fostering an easy and simple entrepreneurship environment 
Use of technology for promoting women entrepreneurship

Key Stakeholders to be engaged at Central Government:

As women account for half of the population of the country and have a leading role to play in every aspect of society, varied stakeholders may be engaged at the Central government level such as:

PMO office: if an integrated policy needs to be made it must have direct linkages with the PMO so as to reach the Sustainable Development Goals of the UN. PMO office can be engaged for finding linkages with PM’s vision of ‘Atmanirbhar Bharat’ and other initiatives of the PM.

Ministry of Women and Child Development: As most of the policies related to women are developed and implemented by MWCD, they must be engaged in advocacy towards the creation and effective implementation of the policies.

NITI Ayog: As NITI Ayog is the technical arm of the creation of policies, they must be engaged for ensuring the creation of these integrated policies and allocation of budgets and inclusion of multi-stakeholders. As NITI Ayog also looks into reporting for the Sustainable Development Goals to the UN, they must be engaged for including reporting on women entrepreneurship in this report and others.

Ministry of Labour and Employment: As this Ministry directly deals with labour participation and welfare, they must be engaged on this matter.

Ministry of Education: As one of the great barriers in women entrepreneurship includes lack of basic education, lack of literacy and knowledge on entrepreneurship, the Ministry of Education or Human Resource Development may be engaged for advocacy on the inclusion of curriculums on entrepreneurship and vulnerable groups of women in their easy access to quality, equitable and inclusive education.

Ministry of Social Justice and Empowerment: As one of the important elements of promoting women entrepreneurship include women’s empowerment and creating a just environment and society for them, engaging this Ministry will be beneficial.

Ministry of Skill Development and Entrepreneurship: As this Ministry directly deals with the topic of interest it can serve as a nodal agency for engagement along with the Ministry of Women and Child Development

Ministry of Rural Development: As many policies for rural development and rural population are developed by this Ministry or have linkages with them, it is important to engage with it as our target group is also rural and semi-urban women.

Ministry of MSME: As this ministry directly deals with the promotion of MSMEs wherein most women entrepreneurs may be found operating in, they can be engaged for creation of more support for women entrepreneurs.

Ministry of Finance: As every policy needs to be financed, this Ministry can be engaged to ensure every policy and programme and scheme related to women entrepreneurship has adequate budgetary allocations. This Ministry can be engaged for the advocacy on the same.

Ministry of Information and Broadcasting: This Ministry can play an important role in awareness-raising on policies, schemes and programmes of the government to reach women as well as for awareness-raising for protecting and promoting women’s rights as well as promotion of the idea of women entrepreneurship amongst rural communities through TV, radio and other means.

Other Stakeholders to be engaged at Central Government:

Ministry of Statistics and Programme Implementation: As there is a dearth of data and information on the success and failure of the various programmes and schemes and budgetary allocations, this Ministry could be engaged for advocating for research/ study/ accountability of the same.

Ministry of Corporate Affairs: As the Corporate Social Responsibility law of India mandates 2% of business contribution to social causes, investments in women entrepreneurship can be promoted amongst the businesses through engagement with this Ministry.

Ministry of Agriculture and Farmer’s Welfare and Ministry of Fisheries, Animal Husbandry and Dairying: As a large number of women carry out paid and unpaid agricultural, fishing, animal husbandry and dairying work, it is important to liaise with this Ministry to protect women from harmful effects of agriculture activities and promote women entrepreneurship in the sector.

Ministry of Commerce and Industry: As a large number of women are getting involved in nontraditional and non-farming activities, it is imperative to engage with this Ministry to find avenues for promotion of women entrepreneurship.

Ministry of Development of North East Region: As north east part of India includes a large number of rural and semi-urban populations and an untapped potential of women entrepreneurs, they may be engaged too.

Ministry of Tribal Affairs: As many tribal women are involved in creation of marketable tribal products such as handicrafts and handlooms, they can be engaged in promotion of women entrepreneurship.

Ministry of Textiles: As a large number of women traditionally create local textiles in villages and semi-urban areas, involvement of this Ministry may be useful.

Ministry of Panchayati Raj: As village Panchayats have an important role to play in decision making and influencing the community about rural women’s lives, this Ministry can be engaged to ensure panchayats support women entrepreneurship

Ministry of Minority Affairs: As many vulnerable women come from the SC/ST/OBC classes, for their development through women’s entrepreneurship this Ministry can be engaged

Ministry of Mines: As many women are involved in the informal and dangerous work of mining, to promote women entrepreneurship as an alternate means of livelihood, this Ministry can be engaged

Ministry of Parliamentary Affairs: They can be engaged for gender sensitisation and creation of gender-responsive and women-friendly policies on women entrepreneurship

Ministry of Road Transport and Highways: As a large number of road construction workers are women working informally, this Ministry maybe engaged in the creation of women entrepreneurship as an alternate livelihood for women engaged in this work.

Ministry of Housing and Urban Affairs: As a large number of businesses –formal and informal are based out of urban and semi-urban areas and the markets for women entrepreneur’s products are also in urban areas, this Ministry may be engaged.

Ministry of Health and Family Welfare: As women form the centre of family welfare and their health, this Ministry can be engaged as promotion of financial independence of women through entrepreneurship has direct impacts on family’s health and welfare.

Ministry of Food Processing Industries: As a number of women are involved in this industry informally, it is important to engage this Ministry to formalise women’s work in the same and create opportunities for women entrepreneurship.

Ministry of Electronics and Information Technology: As more and more women are finding their feet in this sector, it is important to provide equal opportunities for women coming from rural and semi-urban areas to develop as women entrepreneurs in this field.