The IHDS Forum is a monthly update of socio-economic developments in India by the IHDS research community, based on the India Human Development Survey, jointly conducted by NCAER and the University of Maryland. While two earlier rounds of the survey were completed in 2004-05 and 2011-12, respectively, the third round has also been launched and surveys have already been conducted in a number of States.
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If menstrual leave is made compulsory, it would further discourage employers from hiring female employees, causing women’s participation in work to shrink further.
While the impact of the menstrual cycle varies for every female, the discomfort it brings may heavily affect their efficiency as workers. If a female employee already going through problems like PCOD or PCOS, work-related stress may make it even worse, which may eventually translate to more complex issues like infertility, diabetes, or even heart disease. Monthly paid menstrual leave may help them cope better at work and may bring in efficiency.
However, economic and societal pressure already work against wome. There is a risk that implementing paid menstrual leave might hinder rather than empower women, apart from likely impacting only a handful in the formal sector, and neglecting the majority in the informal and unorganised workforce.
Data from the Periodic Labour Force Survey (PLFS) highlights the post-Covid feminisation of agriculture, with over 85% employed in the unorganised sector where existing government rules are seldom adhered to. In the formal sector, women are notably underrepresented, encountering bias during hiring, leading to difficulties securing employment, which is why many women either accept lower-paying jobs or turn to care work.
Studies show that during economic distress, women are first in the line to lose jobs, the most distressing part of which is that when there are limited options to secure a job, men are perceived as better candidates. It is often seen that if two employees, with the same skill set and experience but of different genders, are candidates for a higher position, males are generally preferred as women are perceived to have household responsibilities that can impact their performance.
If the menstrual leave policy is enforced, it may further disincentivise employers to hire female employees owing to the additional burden of paid leave every month. Female employees are already burdened with care-work, wage gap, and underrepresentation; on top of that, employer bias against female employees would take a serious toll on female employment.
Japan, Spain, South Korea, Taiwan, Indonesia, and Zambia have adopted paid menstrual leave. Among these, Japan, Spain, South Korea, and Taiwan, belonging to the high-income group, might have faced different scenarios during implementation. On the other hand, Indonesia and Zambia are both from the Global South and in some respects similar to India.
In the cases of Indonesia and Zambia, discomfort linked to menstruation is evident, exacerbated by poor workplace hygiene and limited breaks during work shifts. Furthermore, there’s a prevailing doubt regarding whether workers taking leave actually get adequate rest, given the perception that household chores are ‘women’s responsibility’ persists.
Additionally, male counterparts might develop feelings of discontent if they suspect that female employees taking leave aren’t using it for rest. In Zambia, dissatisfaction among colleagues and employers arose when women on menstrual leave used this for personal matters instead of using it to cope with menstrual discomfort. This susceptibility can potentially lead to discrimination in the workplace. A mixed response to menstrual paid leave has been observed among the countries implementing this policy. It appears more beneficial for countries that are relatively affluent and have overcome social taboos associated with menstruation.
Certain Indian startups like Zomato, Swiggy, Byju’s, and Gozoop have adopted paid menstrual leave, positively addressing challenges related to women’s menstrual cycles. Encouraging other organisations to voluntarily adopt similar policies might be more effective than mandating it to all the organisations.
Nonetheless, the National Family Health Survey (NFHS) in India reflects a positive impact of the tax cut on sanitary pads announced on July 21, 2018 where GST on sanitary pads were reduced from 12% to 0%. It reveals a notable increase in women aged between 15 and 24 using hygienic menstrual sanitation products, rising from 57.6% to 77.3% between 2015-16 and 2019-21.
Moreover, there’s been a significant convergence between urban and rural women during this period. While in 2015-16, a considerable gap existed, with 48.2% of rural females aged 15 to 24 using hygienic methods compared to 77.5% of urban females, by 2019-21, this gap had significantly narrowed to 72.3% of rural females and 89.4% of urban females using hygienic methods.
Similar to the tax-cut policy, simpler interventions may play a more prominent role in addressing issues linked to menstruation. Mandating sanitary pads and tampon vending machines at workplaces and educational institutes may help female students and workers cope with their menstrual cycle. Comprehensive sex education, which covers menstrual cycle information, is crucial for both young girls and boys, especially in rural areas lacking menstrual sanitation facilities. Advocating the need for hygienic toilets would have a huge impact, helping more women and girls to attend work and education.
Furthermore, instead of obliging employers, the government could incentivise menstrual leave through tax exemptions for companies offering it or by introducing additional gender-neutral leave policies for all employees. Government aid, such as covering leave costs via Direct Benefit Transfer, could also be explored.
In the Indian context, menstrual paid leave may benefit only a minority of the female population in the short run and may have serious impact on female employment in the long run. To truly benefit from a menstrual paid leave policy, widespread awareness and the eradication of societal taboos associated with menstruation must be addressed.
Ravi Kumar Gupta, Research associate, National Council of Applied Economic Research
Views are personal
As economic data show increasing fragmentation, investment strategies face unprecedented challenges. The OMFIF Global Public Pensions 2023 report examines how global public pensions and sovereign funds are coping with the weakest global growth prospects in decades. While the report reveals the challenges sovereigns face in managing public assets and their changing priorities away from ‘target returns’, it also exposes their contradictory approaches to emerging markets and their continued indifference towards investing in developing markets.
This paradox could seriously affect cross-border capital flows, economic growth and traditional asset markets. Sovereigns are between two conflicting goals: setting up domestic safeguards against uncertain macroeconomic and financial stability risks and supporting international efforts to invest in climate change and facilitate broad-based sustainable development.
For the past two decades since the Asian crisis, sovereigns have faced persistent balance sheet pressures from various sources, such as financial and market failures, income inequality and supply chain shocks. These pressures have led to higher sovereign debt issuance and non-debt liabilities, driven by public interventions and social insurance demand. Moreover, flawed growth models, ageing populations, demographic changes and climate-related costs exacerbate longer-term balance sheet weaknesses.
Shifting sands
The GPP 2023 report implies that asset management choices are limited by rising liabilities, which have increased as expected returns have not been materialising. As the global economy undergoes an unprecedented stress test, the need to rebalance sovereign balance sheets is even more apparent. This also calls for financial guardrails against the consequences of unforeseen events, including a possible, new and protracted economic Cold War.
This is an opportunity for sovereigns to address the long-standing neglect of balance sheet management. For instance, sovereigns should know all their assets (financial and non-financial), liabilities (current and contingent) and net financial position, especially in emerging and developing markets. Using the rapidly emerging technology choices and combining this with information stewardship, sovereigns can better understand their financial situation and invest or raise monies guided by the dynamic interplay between all liabilities.
However, only some sovereigns produce formally integrated balance sheets. This hampers their ability to recognise financial risks promptly, improve capital efficiency and enhance their financial resilience to adverse economic shocks.
A changing paradigm
Once built, sovereign assets become both a source of economic security and a potential source of liability. The social welfare outcomes from building this wealth are no longer a matter of matching or beating investment benchmarks. As the global economy is overhauled, sovereign liabilities become more critical for the effectiveness and accountability of asset management activities. However, a common gap in managing a sovereign’s finances is the need for integration between a returns-only driven asset management approach, its liabilities and the resulting potential financial exposures. This explains in part, why many sovereigns have insolvent balance sheets of central banks and state-owned enterprises and have gradually lost credibility with investors.
By aligning their liabilities and asset management, sovereigns can enhance their resilience, optimise resource allocation and achieve long-term goals. This not only requires a holistic and strategic view of the sovereign balance sheet but a clear and transparent governance framework that ensures accountability and alignment of interests.
One example of a visionary and prudent sovereign is Singapore. To build Singapore’s financial assets and invest them for the long term, a dedicated sovereign wealth fund initiative was launched 40 years ago with an objective more powerful than financial returns – ‘to steady the nerves of Singaporeans.’ To this end, Singapore has focused on its portfolios of assets and long-term liabilities and prepared itself for a new technological ecosystem and a climate-friendly world.
A key to sovereign resilience in the 21st century
Effective management of sovereign balance sheets is crucial for economic governance. Sovereign asset and liability management helps governments optimise the composition of what they owe and own, reduce their financial risk exposure and enhance their financial resilience. With the cooperation of the International Monetary Fund (and others), a few countries are trying to move in that direction.
This integrated approach allows for more flexibility for different types of sovereign assets as well as their interplay with implicit and explicit financial liabilities. Those who have successfully managed sovereign assets and liabilities have followed some common principles. They are adopting a more systematic approach to integrating data from different sources; collecting, extracting, transforming, cleansing, validating and loading/distributing data to other target systems and actively using it for sovereign-level policy formulations.
Balance sheet risks have become more challenging and critical for resource-rich, low-income countries, especially in Africa. These countries face a possible long-term decline in actual commodity prices, the long cycles that characterise accurate commodity prices, the excessive volatility of actual commodity prices, and the fact that this volatility varies over time. SALM can help these countries manage their natural resource wealth, diversify their economies and cope with external shocks.
Every sovereign – advanced, developing or fragile – has financial and non-financial assets and liabilities. According to pre-pandemic data, public assets were about $101tn, or 200% of the sovereign’s gross domestic product, comprising 65% of the global economy. Liabilities were similar. By analysing its portfolio continuously within the SALM framework, the sovereign will be able to recognise risks and test its financial resilience promptly. It will also allow for more accurate and effective sovereign actions in economic crises or financial system problems.
Some may argue that reliable information makes a consolidated view realistic. The solution is to begin and gradually enhance the accounting and statistical methods, data and estimates of the balance sheet items. We should also simulate various stress and economic disaster scenarios to prepare for the future. Together, the sovereign will lay the path to modelling macrofinancial dynamics, leading to more robust and resilient macroeconomic performance, economic development and financial stability.
Udaibir Das is a Non-Resident Fellow at the National Council of Applied Economic Research, a Senior Non-Resident Adviser at the Bank of England, a Senior Advisor of the International Forum for Sovereign Wealth Funds, and Distinguished Fellow at the Observer Research Foundation America.
Margin: The Journal of Applied Economic Research is a peer-reviewed bi-annual journal published jointly by NCAER & SAGE International.
Volume 17, Issue 3-4, August-November 2023 includes the following papers-
Editor: Poonam Gupta
Managing Editors: Shashanka Bhide, Anil Kumar Sharma, Anupma Mehta, Ishita Trivedi