Women Career

Women’s Reservation and the Gender Wage Gap in India

February 24, 2021
crop payroll clerk counting money while sitting at table

The gender pay gap refers loosely to the salary gap between men and women in the formalized labour market and the informal labour sector. This wage gap has widened the subject of discussion internationally as many people argue about the condition of women’s empowerment in various societies around the world. On the other hand, India has been facing this widening wage gap for decades now. This article slots India among the worst 10 countries globally when it comes to the gender pay gap.

The cause for the increasing gender pay gap is nothing but the rigid economic structures prevalent in India. Many governmental bodies’ policies have not been able to eliminate the disparity in pay because of excessive competition in the market place. As a result, most of India’s employees are still struggling to survive from day to remuneration. Moreover, the government’s policies for providing jobs also fail to provide a competitive remuneration package to employees working in various enterprises, including the private sector.

In India, many factors contribute to severe pay disparity. Among them are the gender ratios in the labour force, the overall infrastructure, and the country’s overall economic development. On the one hand, the imbalance in pay disparity results because of the lack of opportunities for women in particular industries to attain even mediocre positions in the workforce. On the other hand, India’s overall economic development is causing wealth accumulation at the top of the pyramid. As a result, there is an increasing concentration of wealth at the top of the pyramid, which has increased the income and wealth gap between the sexes. Economic globalization, rapid technological advances and the liberalization of the Indian economy have contributed significantly to these factors.

Apart from this, the policies of the Indian government, including the Minimum Wage Order and the Employment Gender Disabilities Act, makes it tough for women in particular sectors. There are many reasons for the pay disparity, including discrimination at the workplace and the lack of equality in education, career choices and family responsibilities. In fact, many companies in India fail to implement policies for equal pay for women. This is because Indian society still believes that women are less successful than men. Although this belief is erroneous, some employers still fail to acknowledge the pay gap issue, contributing to the increasing pay disparity in India.

Several reasons contribute to the gender pay gap that exists in India. Among these include the percentage of women holding high-paying jobs compared to men. Although this phenomenon cannot be controlled, it can be prevented by improving women’s conditions at work. On the other hand, according to the latest survey on paycheck data, Indian women are now earning more than men. The rise in hourly income is mainly due to the increased participation of women in the workforce and various policies for gender equality.

However, the recent global economic recession has reduced manufacturing sector wages across all industry across India. Though the immediate impact on the Indian economy is visible in terms of reduction in industrial output and unemployment level, the long term impact is not visible. It may take several years to hit the wages and employment levels. For the Indian women, which are now getting decent wages, this would be a major positive change, but the impact would be devastating for the overall economy.

The critical cause of wage inequality in India is discrimination in the workplace. According to a recent study by the staffing firm ERES, almost 20% of the total number of hiring and recruitment in India last year was done by firms that practice gender discrimination. There is also a widespread problem of gender selection at the recruitment level, leading to a gender wage gap in India. This happens when recruiters select candidates according to their qualifications without considering their gender. This gender pay gap can significantly affect India’s overall workforce productivity, especially in informal sectors, where the participation of women is low.

According to a recently released report by the World Bank, India stands out as the only country in the world that does not provide its citizens with the right to choose the gender when they apply for a job. As a result, the government is working hard to bring about improvements in the gender wage gap. This year, the Supreme Court of India ordered an eight-month extension to the government’s affirmative action policy women’s reservation open in listed jobs. However, the recent amendments to the law on women’s reservation are expected to significantly change the wage equality between men and women in India. The amendments also aim at ensuring better pay for women entrepreneurs, thereby lifting the burden off small and start-up companies in India’s expanding economy.

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