market inequalities, Wood (2000) argues that this depends on two factors, namely, differences in resource endowments and the transfer of knowhow to developing countries. East Asian cheaper labour intensive goods (imports) eroded Latin America’s comparative advantage in low skilled goods, which led to a fall in demand and the real wages of unskilled workers. Similarly, wage inequalities may increase if an effort at inward mobility of highly skilled workers with knowhow is not encouraged and indigenized in areas of comparative advantage.

The evidence on the impact of trade liberalization on women’s employment in the countries of South Asia presents a mixed picture: globalization and increased trade resulted in an increase in women’s work participation in trade related activities in Bangladesh and Sri Lanka (Standing, 1999). Similar rising trends in employment were not evidenced in Pakistan (Dev, 2000). Systematic studies providing evidence on the impact of trade liberalization in India during the 1990s are limited. Available studies based on Indian data give a mixed picture of the feminization of the labour force. Banerjee (1999) argues that since the manufacturing sector exports form a small share of the GDP (less than 10 per cent) and since women workers account for a small share in that sector, expansion of exporting industries is not likely to result in a feminization of the Indian workforce as a whole. Some micro studies, however, report the increased involvement of women in trade-related activities (Unni and Rani, 1999). But this enhanced work participation may be distress-induced according to Mukhopadhayaya (1999). A study of a western city in India (Mumbai), found a substantial increase in labour market involvement on adverse terms and a greater demand on unpaid household work resulting in much greater stress for women workers (Gandhi, 1992). Faster annual growth in female employment in the tertiary sector was evidenced in the urban areas (Deshpande and Deshpande, 1999; Visaria, 1999). Evidence based on some micro studies (Sachetana, 1997) in an eastern state of India showed that women moved from unpaid family labour to wage work in handloom, zari work, and some had found employment opportunities in modernized mills (rayon). It is argued that while some of the increase in labour force participation witnessed in most parts of Asia may be due to greater recognition and quantification of women’s work by enumerators, there has also

been a genuine process of increasing participation by women in most of these countries (Ghosh, 1999).

Another important issue is regarding the conditions of work for women in trade related activities during the outward orientation of the economy. Some case studies (reviewed in Joekes and Weston, 1994) which are primarily of Export Processing Zones (EPZs) and export oriented manufacturing units show that women are better off in EPZs than in domestic industries, especially when their total remuneration is taken into account. Evidence in Baden and Joekes (1993) suggests that young single women were the preferred workforce. Some other studies show that the pay is poor and working conditions appear to be poor. A study of two EPZs in Bangladesh (in Chittagong and in Savar) concludes that, though the women are more empowered now than when they were confined to their households, yet they are not treated at par with the male employees and that discrimination in wages between men and women remains. What is more disturbing is that most educated women were absorbed into low wage sectors such as the manufacture of clothing. Wage discrimination was more severe among married persons than among young single persons. However, there is also some evidence which points out that in some cases new transnational export industries have provided women with employment at competitive or higher wages than other forms of local employment, which has given women a sense of freedom and greater autonomy (Lim, 1990 in Beneria and Lind, 1995); empowered them and perhaps helped them escape domestic violence (Kabeer, 1995).

Available evidence on trade and employment suggests that:

• The growth of export oriented manufacturing has benefited women, especially as it has created more jobs for them
• It has drawn some women into paid work for first time
• Wages are lower than those of men but perhaps higher than what these women would have earned in alternative employment
• Evidence in some countries suggests that the regularity of wages from factory jobs (where preference for women is clear) has increased their influence on household decisions
• Evidence on working conditions is inconclusive; some studies suggest poor conditions and poor pay.

However, feminist literature points out that the research on trade

and employment has gaps, as it does not include gender explicitly as an analytical category. It does not address issues of the functioning of the invisible economy where women play a crucial role. It does not tell us whether competitiveness and comparative advantage in trade can be created to benefit from globalization, where female education can play an important role. It does not tell us if it is factors other than education, such as ‘docility’, ‘amenability to discipline’ characteristics (which would be crucial for requirements such as just-in-time methods, which are likely to increase under trade liberalization) that play a crucial role in the feminization of the labour force.

Most of the literature and evidence on gender, trade and employment is based on case studies of specific export sectors of EPZs. This is partly due to a general lack of gender-disaggregated data on employment by major export sectors in developing countries, on a time series basis. Some official agencies do undertake specific labour force surveys, which give data for that year. These surveys are typically undertaken with a gap of a few years and a lack of these data on a regular basis makes it difficult to study changes in the employment of men and women in export sectors that are associated with globalization and trade policy changes.

Fontana and Wood (2001) by constructing a gendered Computable General Equilibrium (CGE) model for Bangladesh have attempted to analyse the impact of trade liberalization on women at a more macro level. They have tried to simulate the effects of changes in trade policies on the employment, wages, leisure and social reproduction activities of women and men. They found that an increase in production and the export of ready-made garments in Bangladesh during the last decade had led to a large increase in employment in the manufacturing sector for both men and women, but the increase was larger for women. Women’s wage rates increased both absolutely and relative to those of men, suggesting a narrowing of the female/male wage gap by about eight per cent. However, women’s participation in other activities namely social reproduction, agriculture, and leisure time, fell; the fall being largest (about six per cent) in the case of women’s leisure time. These results suggest that women’s well being is not necessarily improved by the expansion of female-intensive manufactured exports (as their leisure time reduces); and the reduction in hours of social reproduction also has adverse implications for children and

dependents. This suggests that even when the economic impact of trade liberalization is favourable for women, there is a need to design complementary policies ‘to reduce competing demands on women’s time’. These policies may include measures to improve water collection, food processing and the availability of market substitutes for household services, such as childcare (Fontana and Wood, 2001).

Employment of Women in Export Sectors in India

There is a large body of evidence which shows that in developing countries, women make a significant contribution to the national employment, output and trade levels. Changes in policies that affect trade and employment impact women directly as the poverty of women is closely linked to their pattern of employment and their disadvantages in the labour market (see Palmer, 1991). To provide the context for examining employment changes in various sectors, we now present a brief review of the macro economic and external sector performance of India during the first generation reform period.¹

Macro scorecard

The Indian economic reforms, a process initiated in July 1991, were a response to an internal as well as an external crisis, when foreign currency reserves plummeted to about $ one billion (or two weeks of imports), export growth turned negative, industrial growth was –1.3 per cent, inflation was soaring above 16 per cent and overall economic growth was down to one per cent (in 1991–92). As in many other developing countries, especially after the adoption of the SAP, exports in India also have been conceived as an engine of economic growth.

The reform package combined stabilization with fiscal discipline and expenditure switching through structural reforms. The first

¹The period 1991-99 is being referred to as the period of first generation reforms and the period since 1999 (when the present Government was re-elected) as a period of second generation reforms when reform process continued with further liberalization of the insurance sector as announced in March 2000 at the time of the presentation of the Government of India Budget of 2000-2001.

generation reform package included a strong stabilization programme and wide-ranging reforms in fiscal policy, industrial policy, foreign trade, the exchange rate system, foreign investment policy, the financial sector, and the public sector. The reduction of the fiscal deficit (from over 7–8 per cent of GDP in the early 1990s to a targeted 4 per cent of GDP) remained central to both the stabilization and the structural adjustment components. For want of space, details of the reforms measures taken in India so far have not been listed here, but they can be found in the recent Economic Survey of the Government of India (Ministry of Finance, 2002).

There are varying views on the macro economic performance of India during the reform period. The promoters of reforms (including the GOI) argue that the performance has been impressive. Except for the crisis year of 1991–92, the average real GDP growth rate during 1992–93 to 1998–99 was 6.5 per cent. The industrial growth rate varied from a low of 2.3 per cent in 1992–93 to a high of 12.8 per cent in 1995–96, averaging around 6.5 per cent for the period between 1992–93 to 1998–99. The agricultural growth rate averaged around 2.5 per cent, with a number of year-to-year variations as shown in Table 3 below. In terms of overall economic growth, India has shown better recovery

during the reform period when compared with other developing countries undertaking post-crisis reform programmes. India’s average economic growth of 6.4 per cent in the first three years after the start of the reforms programme in mid 1991 compares favourably with an average of 2.2 per cent for 30 developing countries surveyed in one study (Thomas et al. (eds.), 1991). (Annexe 2).

The performance of the Indian external sector during the reform period was also impressive. Since 1990–91, when the structural adjustment phase was initiated in India, exports faced an initial setback in 1991–92, when they declined by 1.5 per cent in dollar

terms. The revival started from the following year, when Indian exports increased by 3.8 per cent; this was followed by an impressive export growth in the next three years, averaging about 20 per cent during 1993–94 to 1995–96. India’s export growth rate has been better than that of the world as a whole since 1993–94, except in 1998–99 (see Annexe 3). Some international factors such as the world recession in 1998 and the Southeast Asian currency crisis affected India’s export growth rate during 1998–99. During 1999–2000, however, provisional estimates show a high export growth rate of 13 per cent. The current account deficit came down from an unsustainable level of $9.7 billion (3 per cent of GDP) in 1990–91 to a manageable level of 1.0 to 1.5 per cent of GDP even after there was higher import growth since 1993–94. Foreign investment rose to $4 billion by 1993–94 and foreign currency reserves built up from two weeks import cover in 1990–91 to six months import cover by March 1995 (Acharya, 1999).

Trade liberalization aspects, which are to do with the impact of changes in import tariffs and quantitative restrictions on imports, which in turn may have a direct impact on the employment of men and women, are not so well researched and documented. The trade liberalization measures included progressive reductions in custom duties: the peak custom duties were reduced from 300 per cent in mid 1991 to 30 per cent in March 2000. Quantitative restrictions on a wide range of imports were also removed since 1993, as these could no longer be justified on Balance of Payment (BOP) grounds under Article XVIII-B of GATT. India has removed all quantitative restrictions under the WTO with effect from April 1, 2001. The implication of such liberalization on the import restrictions for the employment of men and women and their livelihoods have not been investigated in detail and there is little evidence available in developing countries on this issue.

Along with the trade liberalization measures, a multi-pronged strategy was followed to contain the external debt situation. The strategy included: reduction in short term debt and strict controls; making the medium term borrowing from private commercial sources subject to annual caps and minimum maturity periods, encouragement of non-debt creating flows (especially FDI and portfolio investment), accumulation of foreign exchange reserves for covering external sector uncertainties, etc. As a result, external debt indicators improved. A comparison of basic debt indicators of India

and some Asian countries and China shows that India had achieved a relatively high degree of comfort level by 1997 (see Annexe 4). Despite the economic and financial crisis in south-east and east Asia which dominated the global economic scene during 1998, limiting the world economic growth rate to less than 2 per cent and world trade growth to 3.7 per cent, the Indian economy exhibited a strong macro economic growth (ESCAP, 1998:3).

Some others (Chandrasekhar and Ghosh, 2002) argue that the view that the economic reforms of the nineties led India to a new, higher growth trajectory is claimed typically by the GOI. They suggest that the transition to a higher growth path occurred during the latter half of the 1980s when the liberalization was limited and not in the 1990s when the liberalization process was fast and more widespread. The macro economic performance in the latter half of the nineties was not so impressive: primary and secondary sector growth rates showed a deceleration during this period as compared with the first half. The tertiary sector growth was higher in the second half of the nineties as compared with the first half but this was helped by the increased government expenditure on salaries of government officials. The projected real GDP growth rate of 6.0 per cent for 2001–02 was revised downwards by the GOI to 5.2 per cent. They also argued that the reforms failed to meet expectations with respect to infrastructure provision and increase in employment generation.

Poverty data shows a clear evidence of a decline in poverty in India during the 1990s as compared with the 1980s. According to official estimates, the population below the poverty line declined from 36 per cent in 1993–94 to 26.1 per cent in 1999–2000. There is, however, a debate on these poverty estimates and there is no clarity on the comparability of poverty estimates for 1993–94 and 1999–2000 as the methodologies used were different (for details see Ministry of Finance, 2001:194). National Sample Survey results showed that a rapid fall in poverty between the seventies and early nineties was associated with a rise in GDP growth, however, the evidence of the mid (1993–94) and late 90s suggests a lack of poverty reduction at the same rate despite higher economic growth. Some other poverty indicators also showed an improvement during the 1990s. Real wage rates for agricultural labourers showed an improvement during the 1990s as compared with the 1980s. The employment in the organized manufacturing sector grew faster in

the 1990s as compared to the 1980s (Parikh and Radhakrishnan (eds.), 2002). However, a significant reduction in poverty in China was reportedly due to a rapid increase in the non-farm rural employment at the rate of 12 per cent in the 1980s as compared to only two per cent in India.² World Bank study estimates poverty in India is declining at the rate of one per cent a year in the past five years and this could happen at a faster pace if the investment climate in the country is improved. According to the World Competitive Yearbook, the Indian investment climate has been judged to be poor (43 out of 47 countries ranked) and FDI attracted is only 0.5 per cent of the GDP. As compared to this, China is ranked better (at 31) in terms of the investment climate and attracts FDI worth 5 per cent of GDP.

Macro scorecard provides a mixed picture about the performance of the Indian economy. The government argues that economic reforms in India have been successful in terms of the macro economic performance and in the reduction in poverty during the 1990s. Others argue that the experience of reforms failed to deliver the promised growth and efficiency, particularly in specific areas such as infrastructure provision, employment generation and food systems. This raises an obvious question about the adequacy of the nature, speed and sequencing of reforms in India. We will not pursue this question further, since the focus of this essay is on trade and employment, except to say that some of the major problems which existed in the early years of reforms remain and these may limit potential growth and social outcomes in the medium and long term. Some of these problems include the paradox of surplus foodgrains and the decreasing availability of foodgrains per capita, the slowdown of GDP and export growth towards the late 1990s, the persistent high fiscal deficits, the inadequate physical and social infrastructure and the lack of effective governance (see discussions in Parikh and Radhakrishna (eds.), 2002)

More specifically on the exports front, the potential of export sector to serve as an engine of growth seems limited by the low absolute value of India’s exports and the composition of the export

²Quoted in a seminar by Chief Economist, World Bank in Delhi on March 27, 2001.

basket. In terms of their absolute value, India’s exports continue to be much lower than those of other important Asian countries. During a period of two decades, a number of Asian countries namely South Korea, Thailand, and China, with export values not very much higher than India, have surpassed India’s levels many times over. In 1998, India’s exports were valued at only US$ 35 billion as compared to US$ 184 billion for China; US$ 133 billion for South Korea; US$ 73 billion for Malaysia; US$ 54 billion for Thailand; US$ 49 billion for Indonesia and this was in a year when some of these economies were in a financial crisis. The composition of India’s exports also shows their vulnerability as India’s export basket is narrow. The country depends on only few sectors for our exports, which implies that any little change in the markets, or prices of these items, will affect Indian exports significantly. In 1997–98, about 1/4th (25 per cent) of India’s exports were textiles, two major items of which are readymade garments (13 per cent) and cotton yarn and fabrics (8 per cent); about 15 per cent of our exports are made up of gems and jewellery; and about 18 per cent are made up of agriculture and allied products. Therefore, the potential of exports to serve as an engine of growth depends on a pro-active diversification strategy along with other measures of improvement in infrastructure and the investment climate. Historical evidence shows that Foreign Direct Investment (FDI) has been a key factor in reforming the export and globalization efforts of countries. India has not been able to attract FDI linked to exports, whereas in China, about 47 per cent of the exports are directly generated by FDI.

Employment of women in India: various sources

In order to be able to understand the impact of the new policies on the economic status of women, a detailed understanding of the occupational pattern of women (and men) employees is necessary. This tells us about the areas and sectors which are especially relevant from the point of view of women’s employment. Thus, the desirability of a new policy may be judged well from its impact on these areas and sectors.

A major problem in assessing the (gender-disaggregated) impact of liberalization policies is the problem of the counterfactual, that is the problem of assessing what would have happened if there were

no changes in the policies. Another major problem is related to the lack of sector-wise gender disaggregated data on a time series basis. If changes in the employment of men and women have to be examined in the context of liberalization, detailed data on employment in export sectors (and other sectors) is required on a long-term basis. Unfortunately these data are lacking in most developing countries.

In this section, we present a brief review of various sources of employment data in India and some broad observations on women’s employment based on these sources. We then comment on the possibility of compiling information on the employment of men and women in major export sectors in India. We point to the general lack of such data from official sources. However an attempt is made here to arrive at estimates of employment levels and of the employment intensity of women in some major export sectors; we also analyse changes in employment patterns in the export sectors during the reform period based on these data. Employment data are available for the major industrial divisions according to National Industrial Classification (NIC) codes and export data are available as per the International Harmonized System (HS) codes. The sources for these are the National Sample Survey Organization’s (NSSO) surveys and the Ministry of Commerce (Government of India) respectively. Activities according to the NIC classification have been grouped together under various export product heads and accordingly NSSO estimates on employment have been assigned according to these product categories.

Three primary sources of employment data in India are: the Ministry of Labour’s estimates on organized sector employment; Indian Census data; and the National Sample Survey Organization employment surveys on employment which include 38th Round (reference year 1983–84), 43rd Round (reference year 1987–88), and 50th Round (reference year 1993–94). Indian Census data sources provide data on the employment of men and women in nine major industrial categories, by the rural-urban division, for India as a whole and also state-wise. Ministry of Labour data are based on surveys of establishments of a certain size in the public and private sectors. These data are available with a number of years of lag. Both the sources provide data at a fairly aggregated level. The NSSO data are based on sample surveys and are said to be more detailed and reliable. These are available at a disaggregated

three-digit level giving details of men and women employed in various activities in various sectors. The limitation of these data is that they are based on sample surveys, and therefore, are likely to underestimate total employment, and that they are available with a gap of four years. We present the main facts on the employment of women from these sources. In the next section, we use the three digit level detailed data from the 43rd and 50th Rounds of NSSO surveys to arrive at estimates of employment in major export sectors, and to analyse changes in women’s employment in these.

The services sector is another important emerging sector, which contributes to a large share of the GDP, and to the export sector in a number of Asian countries such as India. Recent world trade in software is estimated to be $ 250 billion, of which India’s share is 1.6 per cent ($ four billion), which is much higher than the share of India’s exports in world merchandise exports (0.6 per cent). There is great potential for increasing India’s exports and its share in world trade both in software and information technology enabled services. However, in this essay, our discussion is limited to the manufacturing sector.

There are two aspects of women’s employment which are important, one is their employment as a percentage of the total female population, indicating the female work participation rate and the other is women’s employment as a percentage of the total number of persons employed in a sector indicating the female intensity of production in that sector. What is more often analysed is the female work participation rate. We calculate and examine the implications of changes in the latter also as it gives the contribution of women’s employment (vis-à-vis men) in a specific sector.

Ministry of Labour data on employment

Data on the occupational pattern of women employees are provided by the Directorate General of Employment and Training (DGE&T), the Ministry of Labour, and the Indian government’s report entitled ‘Occupational educational pattern of employees in India’. This report presents the occupational pattern, its analysis and the educational profile of employees in the private sector as well as the public sector. It is based on data collected through the occupational and educational enquiry in respect of private sector

establishments coming under the purview of the Employment Market Information (EMI) programme.

The EMI programme covers the organized sector of the economy, which includes: (i) all establishments in the public sector (except defence establishments and armed forces); (ii) non-agricultural establishments in the private sector employing 25 or more persons on a compulsory basis and establishments having 10–24 workers on a voluntary basis.

Occupational studies conducted by DGE&T provide data on the occupational distribution of white collar and blue collar workers as well as owners, proprietors, working partners or directors of firms, who are engaged on a full time basis in the establishments. A major limitation of these data is that they are likely to grossly underestimate the employment of women (and men) as they do not cover self-employed, part-time employees, agriculture and allied occupations in the private sector, household establishments, establishments employing less than 10 workers in the private sector and defence forces. The data are likely to underestimate women’s employment more as women are largely in self-employment and in smaller household establishments.

Table 4 below has been compiled from the private sector issues of ‘Occupational education pattern of employees in India’ (OEPI) for the years 1985 and 1991.

The share of women in total employment in the private sector increased from 17.8 per cent in 1985 to 20 per cent in 1991. Of the 10.25 lakh women employees in 1991, most (47.9 per cent) were employed as farmers, fishermen, hunters, loggers and related workers and the next large share (32 per cent) as women professional, technical and related workers, a group dominated by teachers and nurses. Data from the OEPI issues on the public sector, from its latest issue of 1992 (reporting data collected for 1984) have been presented in Table 5 below. These data show that women employees constituted about 11.3 per cent of the total employment in the public sector in 1984. Examining the share of women in different occupational categories we find that most of the women employees were professional, technical and related workers (and among them 65.5 per cent were teachers particularly in primary and middle schools). Clerical and related workers constituted the second largest group. When looking at the occupations which accounted for a major proportion of the women

as a percentage of the total women employed in all the occupations, we find that clerical and related workers constituted the single largest occupational category accounting for 30.8 per cent of the total of women’s employment. Professional, technical and related workers had the second largest share of 26.9 per cent of the employees. Production and related workers and transport equipment operators and labourers followed closely, constituting 24.4 per cent of the total of women’s employment.

As mentioned earlier these data have limitations in coverage and may underestimate women’s employment in both the private and public sectors. Other limitations of these data include non- response by the establishments;³ data not updated by employment exchange;

³For example, out of 1,21,468 establishments only 90,515 responded in the 1984 public sector survey and only 64.5 per cent responded to the 1991 private sector occupational enquiry.

information furnished by the establishments not being in correct form and incomplete information. However, these data do suggest useful trends and facts about women’s employment shares and confirm evidence which suggests that women are concentrated in agriculture and low paid professional services.