State should foot bill for maternity, paternity leave

The Rajya Sabha has just amended the Maternity Benefits Act, mandating 26 weeks of paid leave for mothers against the existing 12 weeks. Many feminists will cheer. But as a feminist myself, I view this as highly flawed.

Feminism should be about gender equality, not doles to make up for discrimination. Many countries now give paternity leave to fathers as well as mothers. India should follow suit.

Global studies show lower child mortality and higher gender equality in societies where both parents care for babies. Ignore the claim that only mothers can breast-feed babies, not fathers. Women can use breast pumps to pump milk into bottles that fathers can feed babies with.

Maternity leave benefits the richest 10% of workers in the organized sector. Female farmers, casual workers, self-employed women and housewives are excluded. Since maternal leave payments are linked to pay, the richest women earning lakhs per month are the greatest gainers, whereas needy mothers get nothing. What’s feminist or fair about this?

Ideally, leave for both parents should be financed by the state, benefiting all families and not just the labour elite. For equality, the benefit should be a fixed sum, unlinked to pay. The richest will suffer. So be it.

Doubling maternity benefits can actually affect women adversely. Maternity leave increases the effective wage of females versus males, so employers tend to avoid hiring women. When I was editor of Financial Express, I advertised for new recruits, and hired three girls. The general manager said, “Mr Aiyar, can’t you find some nice-nice boys?” I replied, “Why not nice-nice girls?” He responded, “Oh, they will all get pregnant and go on leave.” I retorted, “They are all so bright that they will leave for other newspapers before they get pregnant.”

The story highlights how maternity leave, aimed at helping women, propels discrimination against them. If fathers and mothers both get leave, the incentive to prefer males will disappear.

Increasing maternity leave from 12 to 26 weeks will significantly increase wage costs in labour-intensive industries that India needs to provide jobs and competitive exports. Such leave is much lower in countries India competes with in labour-intensive exports — 14 weeks in China; 8.5 weeks in Malaysia and the Philippines; and 12 weeks in Sri Lanka, Mexico and Pakistan. Even communist Cuba gives only 22 weeks. A recent study suggests that only two countries offer more maternity leave than India’s proposed 26 weeks.

This will hit the Make in India scheme, aiming to get a big chunk of labour-intensive production moving out of China because of rising wages there. India is already uncompetitive vis-a-vis low-wage countries like Bangladesh and Vietnam. Higher maternity leave could crush the dream of India creating giant garment factories employing hundreds of women, as in China or Bangladesh. Instead production will remain in small unorganized units that escape maternity leave and other perks of the labour aristocracy like pension and ESI benefits. The consequent lack of scale economies will keep India non-competitive, hitting employment and exports.

The problem will ease if benefits to all fathers and mothers are paid by the state, not employers. That will offset the disadvantage to large exporters. Financing maternity plus paternity leave for all Indians of marriageable age will, however, be very expensive. The costs can be checked by starting with major cities, and expanding gradually to all areas.

Global studies show that giving leave to both parents improves the chances of women returning to the workforce — their mental peace and job prospects improve considerably. India has virtually the lowest female work participation in the world. Only 21.9% of all women and 14.7% of urban women work. India is supposedly reaping a demographic dividend because a greater proportion of its population is now in the working-age range of 16-65 years. But this dividend is getting eroded since females do not work. Parental leave paid by the state will help improve the demographic dividend.

Critics will say, “How can you subsidize all childbirths when we need population control?” Sorry, but what was once a population problem has now morphed into a demographic dividend. To check excesses, the benefit can be halved after the second baby.

Just think. Leave for both parents paid by the state can reduce gender discrimination, improve social outcomes, make employers more competitive, increase the number of jobs and exports, and improve the demographic dividend. Those are exactly the sort of public goods that governments should finance.

What do you think?