Nestled in the crowded bazaar of Jail Road Market in New Delhi is a tiny shop selling colourful kurtas and pants for women, a common business in this neighbourhood and in hundreds of similar markets across northern India. However, the owner of this shop and her story are anything but common. The owner is Jasmeen Kaur, creator of the now-famous words “So beautiful, so elegant, just looking like a wow!”
Kaur shot to fame with this catchy phrase when Bollywood star Deepika Padukone recited it on social media and made it famous. The rise of Instagram and social media, as well as their accessibility to millions of Indians, ensured that the phrase “looking like a wow” became “viral” and made Kaur a celebrity, potentially creating a pan-India – as opposed to local – market for her wares. She signifies the rise of a new India; an India where polished English and high-profile university degrees and MBAs are no longer a prerequisite for success.
Today India has millions of successful women entrepreneurs like Kaur. According to Bain and Co, there are approximately 15.7 million women-run enterprises in India, constituting 22 per cent of the overall entrepreneurial landscape, a figure that has the potential to rise to 30 million with further support and encouragement. For example, 500 km from Mumbai, in the buzzing industrial town of Dewas in Madhya Pradesh (with a population of approximately 2 million), a mother earns a livelihood by making and selling papads on Meesho, an online marketplace for consumer goods, especially popular in tier-3 and tier-4 cities. The profits she generates from selling this humble Indian snack enables her to not only pay for her daily expenses but also for her son’s tuitions, thus making her financially independent of the men in her family.
Rather than being exceptions, such stories are the norm today in India. Women throughout the country are successfully launching their own businesses. According to Periodic Labour Force Survey (PLFS) data, women’s share in self-employment has been steadily rising in India, especially in rural areas, whereas men’s share in self-employment has been falling.
While the self-employed category is vast and includes unpaid labour too, if we go one level deeper and see the stratification within the self-employed, the rise of women entrepreneurs (rather than “woman unpaid” labour) is evident. For women, the share of “self-employment by own account” (i.e. running an enterprise of one’s own) and “self-employment as an employer” (i.e. running a business in which the owner is an employee and, in addition, employs others) has increased between 2017–18 (when PLFS started) and 2022–23. It is notable, that the same trends are not visible for male workers. Even more remarkably, the share of women performing unpaid labour has gone down during this time period.
So, what is going on here? What are the drivers of the rapid rise in entrepreneurship among Indian women? We believe there are several forces at work here, including rising education levels among women, greater access to financing for women and greater female political participation.
Not only are more Indian women getting educated, but they are also getting educated more rapidly than their male counterparts. India’s female literacy rate in 2011 was 64.6 per cent, and the male literacy rate was 80.6 per cent. However, between 1961 and 2011, female literacy in India has grown three times faster than male literacy (approximately 3 per cent per annum, vis-à-vis approximately 1 per cent per annum).
However, the ascendancy of Indian women in education is even more comprehensive than what the enrolment numbers suggest; not only are more women getting educated than men, but the women are also getting better educated than men. We know this because, in May 2023, the pass percentage of girls was 6 percentage points higher than that of boys7 in the class twelve examinations of the Central Board of Secondary Education (CBSE).
Interestingly though, despite the uptrend in the educational attainment of women in the country, their labour force participation rate (LFPR) has been trending down since 2000, when it peaked at around 31 per cent. And while the rate has improved significantly post-Covid, it remains low relative to other countries at a similar stage of development.
Given this seemingly worrying trend in the data, there is naturally a lot of concern around both the employability and income of Indian women. Are these concerns justified, and is the situation of Indian women really worse than what it was thirty years ago?
We believe the answer to both these questions is an emphatic “no”. Indian women today are in a much better position, socially and financially, than they ever were. There are primarily three reasons why we believe so.
When someone stays longer in the education system, their entry into the workforce will be later than it would have been had they not studied for longer. If we look at the LFPR data, but with a different lens, namely age-wise stratification, a completely new picture emerges. While the LFPR for women in the age bracket of 15–24 has gone down substantially since 2010, the LFPR for the age bracket of 25–35 has remained fairly stable; and, remarkably, the LFPR for the 35-plus age bracket has actually gone up.
Combining this with the fact that a majority of India’s demography in the past decade was in the 15–24 age bracket, it implies that as more girls were getting educated, the LFPR was impacted adversely. However, such an impact is optical, because as this cohort starts entering the workforce, the LFPR will improve. Ironically, if you believe in this line of thought, a more decisive improvement in LFPR will only happen when India starts to age (because then, in proportional terms, fewer Indian women will be entering higher education, and a greater proportion will be in the workforce).
The financialisation of the Indian economy has transformed how Indians deal with their monies and their investments. As a result of Jan Dhan and UPI, more women today hold bank accounts vis-à-vis their male counterparts. According to World Bank data, the proportion of women above fifteen years of age holding any financial account divided by the proportion of men above fifteen years of age holding a financial account crossed the ratio of 1 in 2021 itself, meaning that a greater proportion of women is in the financial system today (as a percentage of total women) than their male counterparts in the financial system as a percentage of total men.
As more women are included in the financial system, they are finding it easier to get access to credit. That, in turn, means business expansion has become much easier than before (courtesy of their bank statements containing hundreds of UPI transactions, which validate the revenues being generated by their enterprises).
Furthermore, a study conducted by MassChallenge and BCG for multiple countries found that startups founded or co-founded by women got less funding but generated more revenues than those founded or co-founded solely by men. This implies that women are better capital allocators than men.
Basis the debt default (gross non-performing assets, or GNPA) data, women are better borrowers (see exhibit below). From a lender’s perspective, women entrepreneurs are the perfect conduit through which a lender can lock into the flywheel of higher credit, resulting in greater investments into business, greater revenues and profits, and therefore greater payback of credit and lower delinquencies, leading to higher credit uptake again.
The flow of money into bank accounts is a function of the account owner’s earnings. At a pan-India level, as of 2023, men on average hold approximately Rs 90,000 in their bank accounts, whereas women hold less than half that amount. However, the numbers change dramatically if we look at the bank deposit data for urban India, where the role of physical strength in earning money is lower than it is in rural India. In “urban” areas (defined by the RBI as centres with a population of above 1 lakh but less than 10 lakh), in 2023, for the first time in Indian history, women’s deposit balances exceeded those of men. More stunningly, in “metropolitan” areas (defined by the RBI as areas with a population greater than 10 lakh), women’s average deposit ticket size has grown by 10 per cent from 2019 to 2023 and is now significantly higher than that of men!
In the years to come, as the Indian economy moves increasingly from domination by industries investing in tangible assets to industries investing in intangible assets, the kind of jobs that incrementally get generated will require greater intellectual muscle than physical strength. With better-skilled women entering the workforce, wherever the demand for skilled labour gets satisfied by this cohort, there is every reason to believe that wealth and income will swing in favour of urban India’s women even more decisively.
Excerpted with permission from Behold the Leviathan: The Unusual Rise of Modern India, Saurabh Mukherjea and Nandita Rajhansa, Penguin India.
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