Could digital and financial inclusion be India’s solution to gender inequality?
India's participation in the recent BRICS summit held in Kazan had some interesting gender undertones. Compared to last year, this year's summit placed greater emphasis on recognizing the vital contributions of women to the political, social, and economic progress of BRICS countries. A stronger focus was also placed on expanding access to finance and digital infrastructure for women and fostering the growth of women-led businesses. This commitment was exemplified through landmark events such as the inaugural BRICS Women’s Entrepreneurship Forum and the first BRICS Women’s Startup Contest. These initiatives resonate closely with the Indian government’s vision of promoting women-led development, reinforcing its broader message of empowering women as key drivers of progress.
So, it’s prudent to ask how does India fare on different macroeconomic gender indicators as compared to its BRICS peers? The answer, in short, is mixed. While India has made strides, particularly in women’s access to college education, it still lags on key economic indicators. Fortunately, two transformative forces currently shaping the Indian economy—financial inclusion and digitalization—could offer a unique pathway for India to bridge this gender inequality more rapidly than anticipated.
At a GDP per capita of $2,485 in 2023, India is the poorest among the BRICS nations, making direct comparisons on gender misleading. Therefore, comparing India’s gender metrics with those of other BRICS nations at similar stages of development provide a fairer view. Using India’s 2022 Human Development Index (HDI) score as a benchmark, we draw comparisons with China in 2005, Brazil in 1995, and South Africa in 1992, when their HDI scores were comparable to India’s. Russia, however, consistently had a higher HDI score than India since the index was first measured, making a direct comparison less meaningful.
India's Gender Indicators: A Contextual Comparison
India appears to be lagging behind the other BRICS countries (when they were at similar development levels) in nearly every macroeconomic gender indicator, with one notable exception—higher participation of Indian females in tertiary education. However, the statistics for the labour market are quite alarming. Only about 20% of employed women in India earn a regular salary, compared to an average of 60% in other BRICS nations. This disparity is exacerbated by the large gender gap in labour force participation (LFP), even after a steady increase in India’s female labour force participation rate over the last few years.
Comparison among different gender indicators across BRICS at the same level of HDI
India’s sex ratio at birth is now comparable to the BRICS average at similar stages of development. Though, the maternal mortality rate remains a pressing issue, with India’s figures nearly double than that of the BRICS on average. It is important to realise that these figures reflect where Brazil and South Africa were three decades ago, and where China stood nearly two decades ago. Today, the gap is even more striking. For Instance, female participation in tertiary education for BRICS countries is now nearly double that of India, with the gender gap in LFP narrowing further. Given this grim outlook, can Indian women realistically expect to see the same level of progress as their BRICS counterparts have achieved, with the country becoming wealthier?
The Transformative Power of Financial Inclusion and Digitalization
Yet, there is hope on the horizon. Two powerful forces are now shaping India's development, setting it apart from other BRICS countries at similar stages. First, the drive to be more financially inclusive, has tremendously benefited Indian women. A decade ago, only 43% of women over 15 had a bank account, but today that figure has surged to nearly 78%, according to the World Bank. This financial access empowers Indian women, offering them more accessible means to benefit from government support schemes and opening up credit lines for aspiring female entrepreneurs. The second key factor is India's rapid digitalization. A recent NSSO survey reveals that nearly one out of two Indian woman over 15 now has internet access, with more than half of them able to use internet to search for information. This information can be vital for women in India for finding some not well-known career paths, finding employment and getting more awareness of their rights. Furthermore, digital platforms are providing women with new ways to engage in the economy, such as making online payments. The survey also shows that nearly a quarter of women in India now use the internet for online banking, signalling a significant shift toward digital transactions.
These forces could substantially impact India’s gender-related macroeconomic outcomes. As noted, India at its current stage of development already has a comparative advantage among BRICS countries in female enrolment in tertiary education, providing a strong foundation for progress. This cohort is relatively well positioned to leverage the benefits of increasing financial inclusion and rapid digitalisation, potentially creating better labour market outcomes. These outcomes include an increase in labour force participation among this cohort of women through two avenues: using digital platforms to get information and access to regular salaried jobs previously out of reach and the combined boost from both digital and financial inclusion enabling women to start their own entrepreneurial ventures or engage in the booming gig economy in India.
Though it might seem ambitious to suggest that digital and financial inclusion alone could solve gender related problems in India, particularly those rooted in patriarchal legacy institutions. Yet, if one considers the pace of these transformations and their ability to democratise access for women in critical areas (where it was not available earlier), one can be more optimistic of the odds of Indian women achieving the progress their BRICS counterparts currently enjoy.