India’s startups and MSMEs
ecosystem went through a very difficult time due to the pandemic and the following lockdown. With revenues and operations getting impacted for most businesses, many ended up cutting costs and some even shut down temporarily or permanently. As per the Centre for Monitoring Indian Economy (CMIE) 6 million Indians had already lost white-collar jobs in the March-August period.
LocalCircles conducted the survey to understand the startup and MSME pulse on their workforce adjustments due to Covid. It focused on how the employment of women has changed in their business. It also focused on the hiring
outlook for women in the next 6 months.
In 2017, the government passed the Maternity (Amendment) Bill that increased the right to paid maternity leave for working women from 3 months to 6 months – the third highest in the world.
Although this was great news
for nursing mothers, a ripple effect of this decision was noticed in many small businesses. They reduced the hiring
of women in their organisations, purely due to financial reasons and the cost of funding maternity leave benefits, according to LocalCircles.
Though the Government came back and moved a proposal allowing companies
to file reimbursement of 7 of the 26 weeks of maternity pay, there were few takers amongst small businesses.
Due to Covid, LocalCircles said women's employment situation has also changed. Many children are now studying by attending online classes from home. Working women have been juggling between running the household, attending to children and delivering on their work commitments.
Small businesses were asked about how the employment of women has been in their business, with 8 months into the pandemic.
In response, 7 per cent said women in their workforce have been reduced by 50-100 per cent. About 12 per cent said this workforce has decreased by 25-50 per cent and another 12 per cent said this minimised by up to 25 per cent.
About 46 per cent said they still have the same number of women in the workforce as pre-Covid-19. Not a single business reported an increase in the number of women employees during the course of the 8 months of the pandemic.
LocalCircles said this means that 31 per cent of small businesses in India have reduced women workforce in the last 8 months. The Labour Force Participation Rate (LFPR) among women in India, is one of the lowest in the world and appears to have slid even further during the pandemic.
Overall, the survey showed that 78 per cent of small businesses in India have reduced their workforce in the last 8 months since the outbreak of the pandemic. About 22 per cent of these businesses have the same or increased workforce compared to pre-Covid levels.
The Government also took steps to help these small businesses through the Atmanirbhar Bharat scheme. But, according to LocalCircles, its advantages as per the feedback from businesses in July this year have been limited.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.