Syllabus Connect :- General Studies -Paper II (Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment)
Mains Connect:-
- Discuss the status of financial inclusion of Indian Women and the suggest measures to improve it in light of Denarau Action Plan.
Over the past year, the Covid-19 pandemic has thrown existing inequalities into sharp focus. While the nation’s attention has been drawn to the plight of migrant workers and farmers, the worsening gender gap has not received similar attention.
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Analysis of the Centre for Monitoring Indian Economy’s Consumer Pyramids Household Survey data by researchers at Azim Premji University showed that women were seven times more likely to lose their jobs during last year’s lockdown, and 11 times more likely to not return to work.
An ongoing survey on micro, small and medium enterprises by Global Alliance for Mass Entrepreneurship and LEAD at Krea University shows that women-owned small businesses were hit more badly by the pandemic; 43% of women-owned enterprises surveyed reported monthly profit less than ₹10,000, compared to just 16% of units owned by men.
India’s government was quick to announce and transfer ₹500 per month for three months of lockdown last year to women through their Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. This seamless transfer of money was made possible by the Centre’s direct benefit transfer-PMJDY linkage, but more importantly, this could happen because the government knew which accounts were held by women.
Unfortunately, the lack of gender-disaggregated data in the banking sector overall meant that only PMJDY account holders received the benefit, and many other deserving women were left out. According to estimates by the Yale Economic Growth Center, more than half of India’s women poor missed the cash transfers.
Even though 55% of PMJDY accounts are owned by women, making for 232.1 million accounts, the problem goes two ways—not all poor women have PMJDY accounts and not all PMJDY accounts belong to the poor. The Financial Inclusion Insight survey from 2017 used by the Yale study showed that while 78% of poor women respondents reported having a bank account, just 23% reported owning a PMJDY account.
In the absence of official numbers, we depend on surveys to get a sense of the trends and extent of the challenge. Global Findex 2017 showed an immense improvement on inclusion with the PMJDY. The percentage of women in India who reported owning a bank account, or an account at any other financial institution, rose from 26% in 2011 to 43% in 2014, and to 77% in 2017.
The gender gap in terms of account ownership effectively reduced from 20 percentage points in 2014 to just 6 percentage points in 2017. But the gender gap in the usage of these accounts stayed high at 11 percentage points.
While economic data is usually spliced by states, geographies (urban-rural) or sectors, the gender angle stays out of the common discourse. So though we all know that women employees and entrepreneurs traditionally face more challenges than men, the extent of disparity remains in the shadows. The case for gender-disaggregated data in banking and financial sectors is a first step towards closing the gender-gap in India.
As a member of the Alliance for Financial Inclusion, India had pledged to close the gender gap in financial inclusion by implementing the Denarau Action Plan adopted in Fiji at the April 2016 Global Policy Forum. To redeem that pledge, we must first generate gender-wise data. The country’s regional and social heterogeneity makes it crucial that this data be granular. The Reserve Bank of India (RBI) and Department of Financial Services (DFS) need to get this implemented.
Second, apart from gender-specific data, there is another important initiative that the DFS and RBI should commit themselves to. That is the appointment of more women as business correspondents (BCs) by banks. The pay-offs will be manifold for economic and social progress in the country.
One of the greatest challenges in increasing access to and usage of financial services by women is the time and cost expended on reaching a bank outlet. Although it is gratifying that a forthcoming working paper, The Fintech Gender Gap from the Bank for International Settlements, finds that Indian women are as likely to use fintech as Indian men, there are bound to be wide regional and rural- versus-urban disparities in this finding.
That is another case for granular data. In states like Uttar Pradesh, Bihar, Rajasthan, etc., where the mobility of women is severely restricted, the situation is likely more serious. Women, in rural areas especially, are reluctant to visit bank branches, where they are often dealt with summarily by male staff.
Understandably then, they are more comfortable if bank agents meet them at their own homes. If these agents are women, the trust factor is magnified. However, women agents form less than 10% of the total agent network. So far, the focus has been on using women in self help groups (SHGs) as ‘bank sakhis’.
This initiative has worked well where SHGs are already in place. However, measures to recruit and train women BCs would help widen the spread of banking, enable the financial independence of women, help them plan their family finances, and facilitate women entrepreneurship, both directly, through credit, and indirectly, with BCs acting as role models.
Denarau Action Plan:-
Did you know that more than one billion women are still excluded from formal financial services?
According to the 2017 Global Findex, close to one billion women are still excluded from the financial system, and there is a 9% gender gap in account ownership’s across developing economies. This gender gap has remained unchanged since 2011, despite overall progress towards financial inclusion.
The Denarau Action Plan identifies measures AFI (Alliance for financial Inclusion) members can take to increase the number of women with access to quality and affordable financial services globally and close the financial inclusion gender gap, noting that the goals of financial access, usage and quality should be pursued in parallel and in a responsible and sustainable manner.
RBI of India is a member.
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Recent Posts
- Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund.
- LEAF is supported by transnational corporations (TNCs) like Unilever plc, Amazon.com, Inc, Nestle, Airbnb, Inc as well as Emergent, a US-based non-profit.
- The world lost more than 10 million hectares of primary tropical forest cover last year, an area roughly the size of Switzerland.
- Ending tropical and subtropical forest loss by 2030 is a crucial part of meeting global climate, biodiversity and sustainable development goals. Protecting tropical forests offers one of the biggest opportunities for climate action in the coming decade.
- Tropical forests are massive carbon sinks and by investing in their protection, public and private players are likely to stock up on their carbon credits.
- The LEAF coalition initiative is a step towards concretising the aims and objectives of the Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanism.
- REDD+ was created by the United Nations Framework Convention on Climate Change (UNFCCC). It monetised the value of carbon locked up in the tropical forests of most developing countries, thereby propelling these countries to help mitigate climate change.
- It is a unique initiative as it seeks to help developing countries in battling the double-edged sword of development versus ecological commitment.
- The initiative comes at a crucial time. The tropics have lost close to 12.2 million hectares (mha) of tree cover last year according to global estimates released by Global Forest Watch.
- Of this, a loss of 4.2 mha occurred within humid tropical primary forests alone. It should come as no surprise that most of these lost forests were located in the developing countries of Latin America, Africa and South Asia.
- Brazil has fared dismally on the parameter of ‘annual primary forest loss’ among all countries. It has lost 1.7 mha of primary forests that are rich storehouse of carbon. India’s estimated loss in 2020 stands at 20.8 kilo hectares.
- Between 2002-2020, Brazil’s total area of humid primary forest reduced by 7.7 per cent while India’s reduced by 3.4 per cent.
- Although the loss in India is not as drastic as in Brazil, its position is nevertheless precarious. For India, this loss is equivalent to 951 metric tonnes worth carbon dioxide emissions released in the atmosphere.
- It is important to draw comparisons between Brazil and India as both countries have adopted a rather lackadaisical attitude towards deforestation-induced climate change. The Brazilian government hardly did anything to control the massive fires that gutted the Amazon rainforest in 2019.
- It is mostly around May that forest fires peak in India. However, this year India, witnessed massive forest fires in early March in states like Odisha, Uttarakhand, Madhya Pradesh and Mizoram among others.
- The European Union’s Copernicus Atmospheric Monitoring Service claimed that 0.2 metric tonnes of carbon was emitted in the Uttarakhand forest fires.
- Implementation of the LEAF Coalition plan will help pump in fresh rigour among developing countries like India, that are reluctant to recognise the contributions of their forest dwelling populations in mitigating climate change.
- With the deadline for proposal submission fast approaching, India needs to act swiftly on a revised strategy.
- Although India has pledged to carry out its REDD+ commitments, it is impossible to do so without seeking knowledge from its forest dwelling population.
Context:-
At the recently concluded Leaders’ Summit on Climate in April 2021, Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund plan that shall be offered to countries committed to arrest the decline of their tropical forests by 2030.
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Why LEAF Coalition?
Brazil & India
According to the UN-REDD programme, after the energy sector, deforestation accounts for massive carbon emissions — close to 11 per cent — in the atmosphere. Rapid urbanisation and commercialisation of forest produce are the main causes behind rampant deforestation across tropical forests.
Tribes, Forests and Government
Disregarding climate change as a valid excuse for the fires, Indian government officials were quick to lay the blame for deforestation on activities of forest dwellers and even labelled them “mischievous elements” and “unwanted elements”.
Policy makers around the world have emphasised the role of indigenous tribes and local communities in checking deforestation. These communities depend on forests for their survival as well as livelihood. Hence, they understand the need to protect forests. However, by posing legitimate environmental concerns as obstacles to real development, governments of developing countries swiftly avoid protection of forests and rights of forest dwellers.
For instance, the Government of India has not been forthcoming in recognising the socio-economic, civil, political or even cultural rights of forest dwellers. According to data from the Union Ministry of Tribal Affairs in December, 2020 over 55 per cent of this population has still not been granted either individual or community ownership of their lands.
To make matters worse, the government has undertaken systematic and sustained measures to render the landmark Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 ineffective in its implementation. The Act had sought to legitimise claims of forest dwellers on occupied forest land.
Various government decisions have seriously undermined the position of indigenous people within India. These include proposing amendments to the obsolete Indian Forest Act, 1927 that give forest officials the power to take away forest dwellers’ rights and to even use firearms with impunity.
There is also the Supreme Court’s order of February, 2019 directing state governments to evict illegal encroachers of forest land or millions of forest dwellers inhabiting forests since generations as a measure to conserve wildlife. Finally, there is the lack of data on novel coronavirus disease (COVID-19) deaths among the forest dwelling population;
Tardy administration, insufficient supervision, apathetic attitude and a lack of political intent defeat the cause of forest dwelling populations in India, thereby directly affecting efforts at arresting deforestation.
Way Forward
Tuntiak Katan, a global indigenous leader from Ecuador and general coordinator of the Global Alliance of Territorial Communities, aptly indicated the next steps at the Climate Summit:
“The first step is recognition of land rights. The second step is the recognition of the contributions of local communities and indigenous communities, meaning the contributions of indigenous peoples.We also need recognition of traditional knowledge practices in order to fight climate change”
Perhaps India can begin by taking the first step.