Where are the women in Make In India’s vision?

Making waves, Prime Minister Narendra Modi’s manufacturing dreams for India have a vision to put the country in the big league. What is missing from the lion’s stride is a focus on women’s entrepreneurial capabilities.

Modi’s Make in India campaign is a bold call to make the nation a manufacturing hub. Modi’s focus has been on getting more multinational corporations in the market through increased foreign direct investment. However, less has been said about what the role of Indian micro, small and medium enterprises (MSMEs) should be in this. Nearly 8% of manufacturing today is from the SME sector. While there are provisions to stimulate the growth of MSMEs, there are no large policy shifts in the way they are being treated.

The Make in India campaign has promised some enterprise-oriented policies. A Rs.10,000 crore fund will be set aside for providing risk capital for start-ups; boosting incubation centres for handholding and scaling-up enterprise productivity; and altering the legal bankruptcy framework to allow for easy exit for sick and ailing firms.

While rural entrepreneurs and scheduled caste entrepreneurs will get new and distinct corpuses to boost income and employment generation activities, missing from this list are any policies to encourage women entrepreneurs in manufacturing. This is despite the fact that women hold a fair stake (14% of registered enterprises, 9% unregistered) among MSMEs.

Two highlighted industries in the Make in India campaign—garment and food processing—are popular among women entrepreneurs. A significant share of women’s entrepreneurship takes place in garment manufacturing, with nearly half of all women-owned enterprises in this sector. With another 10% of women-owned enterprises in food processing, there is significant scope to boost women’s entrepreneurship. Women’s participation in manufacturing at the moment comes in just under 15% in all sectors, which is considerably low and the potential remains unexplored.

Women in manufacturing

Studies show that women have a tougher time manoeuvring and finding success in manufacturing ecosystems compared with traditional crafts, retail and knowledge-based services. Women lack business role models in manufacturing, and with no peer network to learn from, they slide into sectors where they have seen other women achieve success. Creating incentives for women in manufacturing needs to complement strategies to boost manufacturing.

There are a limited number of policies that incentivize women in manufacturing. Women-specific schemes, which are exclusively meant for women, are limited in number and have carried from the erstwhile small-scale industries era, which did not encourage innovative entrepreneurism. These are mostly geared to women who enter entrepreneurship for survival, to generate an income and not for expansion. These policies come with many restrictions on the use of funds as somewhat straight-jacketed capital access, which stymies the potential to be bold and aggressive in an expansionary model of growth.

None of these policies, even if exclusively for women, really address or offer solutions to the unique problems women entrepreneurs face. A recent report by the International Center for Research on Women (ICRW) synopsizes these problems, with finance and marketing being key challenges for women in the entrepreneurial ecosystem. ICRW’s study found that financial institutions act under prevailing gender-biased attitudes and put less faith and confidence in a woman-owned enterprise, often forcing women to start businesses with low financial investments. Since women lack viable networks from which to gather capital (other than family), private borrowing is often not an option.

As part of a larger value chain, women entrepreneurs will be cushioned from these biased loan allocations. With stable orders, a steady cash flow and with proven delivery, scaling up for women-owned enterprises can be done with more efficacy. This stability and ability to scale up can allow women a safer and less risky path to gain confidence, allowing them to venture out with their own production and products.

With constant resistance from market players, women entrepreneurs find it harder to access market knowledge and marketing skills. The head of a women’s entrepreneurship wing at a large industry association added that women are socialized in a way that constrains them in marketing products. Women hesitate in marketing, selling and pushing for their products; restrictions on their mobility and initial hesitation to engage in spaces traditionally dominated by men amplify this.

Possible way forward

Incentivizing diversity in manufacturing value chains in public and private companies is a practical solution to some problems that women-owned enterprises face. Companies such as International Business Machines Corp. (IBM) already promote diversity in their supply chain amounting to Rs 360 crore input from women vendors. Entrepreneurs interviewed in the forthcoming ICRW study recommended that the government create an enterprise-rating system for women-owned businesses that assesses business readiness and rates the eligibility of women-owned suppliers in becoming vendors in supply chains. Women often have to work harder to gain the confidence of actors in the ecosystem. With an accreditation from an enterprise-rating system, a woman will be able to approach large manufacturers with the confidence of an external agency to back her merit.

Already existing initiatives such as Small Industries Development Bank of India’s (Sidbi) receivable finance scheme can be used to ease large companies into this model. The receivable finance scheme allows Sidbi to mitigate the problem of delayed payments to MSMEs with the financial institution paying small vendors, keeping cash flowing to them and giving credit to large vendors.

Incentivizing diversity in the value chain with already existing financial policies can promote success for local woman-owned businesses while contributing to Modi’s manufacturing revolution.

~~ Aditi Surie (Aditi Surie is researcher working with the International Center for Research on Women, New Delhi.)
Article Source: http://www.livemint.com/Opinion/x1NJqQiCdx8bQrxE95ju6N/Where-are-the-women-in-Make-In-Indias-vision.html

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