Women Entrepreneurship in India: Where Do We Stand?

Let’s start with a well-established fact: women make great entrepreneurs. Their ability to balance work and home, multitasking and always keeping the goal in sight easily surpasses their male counterparts.

In the current digital era, women are turning from the job-seekers to the job creator.

And, we are not talking about just startups.

According to the Sixth Economic Census, an estimated 13.5 million to 15.7 million women-owned and controlled enterprises are creating direct employment for 22 million to 27 million people in India. Some might say these are solid numbers. They are, but there are challenges and biases present in the ecosystem, still.

In this article, we’ll look at the data collected by National Sample Survey (NSS) in their 73rd round, and try to understand the current state of women entrepreneurs in India, what’s good and what can be better.

Women-owned Enterprises Across Industries?

?●??????As per NSS 73rd round data, tobacco has the highest share of female owners which is followed by paper and paper products, chemicals, apparel, textiles, plastics, beverages, education, misc. manufacturing, and wood products industries. Also, 89.4 percent of all existing establishments in India were owned by proprietors but only 15.4 percent of these were owned by females.

●??????Whereas on the other hand women entrepreneurs have less representation in some key industries such as food (14.9 percent), retail (10.5 percent), and health (9 percent).

●??????Also from the above diagram, we can see that they are practically absent in industries such as transport (0.23 percent) and furniture (0.2 percent).?

Women-owned Enterprises in MSMEs

Distribution of micro, small and medium enterprises owned by women across India in the financial year 2021.

●??????According to NSS 73rdRound, there are a total of estimated 1,23,90,523 Women-owned proprietary MSMEs in the country.?

●??????West Bengal has the highest share of female-owned MSMEs, followed by Tamil Nadu and Telangana as per the recent data in MSME report 2020.

●??????Whereas Lakshadweep and Daman & Diu have the lowest share in it .

●??????As per the financial year 2021, 20.44%, 5.26%, and 2.67% of micro, small and medium enterprises respectively, are owned by women across India.

Gender Distribution Across Industries

Distribution of firms across industries for male and female entrepreneurs, 2015, CMIE Data.

(Blue line represents male entrepreneurs whereas Orange represents female entrepreneurs).

Rural India

Urban India

State-wise Performance of Women Entrepreneurs

●??????According to the sixth economic census, the highest number of women entrepreneurs is located in the southern regions of India.

●??????Tamil Nadu with the largest share of 13.51 percent, Kerala with 11.35 percent, and Andhra Pradesh with 10.56 percent share.

●???????The top four states with the highest distribution of female-owned proprietary establishments from both rural and urban areas are Manipur (80 percent), Arunachal Pradesh (56 percent), Meghalaya (54 percent), and Kerala (51 percent).

?Analysis

●??????As per the above graphs, female entrepreneurs are dominated in Tobacco and apparel in both urban and rural regions.

●??????In 2015, ten industries accounted for just over 90 percent of all female-owned firms in urban India. These were apparel, retail, tobacco, textile, personal services, education, restaurants, food, and health.

●??????Industries that accounted for just over 90 percent of all female-owned firms in rural India are apparel, retail, tobacco, textile, education, miscellaneous, manufacturing, restaurants, food, and wood. Except for wood, which replaces healthcare, the list is identical for urban and rural India.

●??????As per the gender comparison, in urban areas, apparel accounts for 28 percent of all female-owned firms, but only for 4.3 percent of male-owned firms. On the other hand, transport accounts for 9.4 percent of all male-owned firms, but a mere 0.08 percent of female-owned firms.

●??????In rural areas, apparel and tobacco account for 23.79 and 30.46 respectively of all female-owned enterprises, on the other hand, only 4.88 and 1.16 for male-owned enterprises.

●??????Education sector is mainly captured by female-owned entrepreneurs in both the urban and rural areas.

Challenges

●??????There is an acute lack of female entrepreneurs in some sectors such as transport, restaurant, and health in both urban and rural areas.

●??????The 2019 MasterCard Index of Women Entrepreneurs shows that gender gaps in entrepreneurship have worsened in India. Female Entrepreneurial Activity rate in comparison to men (F/M) in the country registered a fall of 21.9 percent from 79.6 to 62.1 percent between 2018 and 2019.

●??????Women-owned enterprises in India are largely skewed towards smaller-sized firms, with almost 98 percent of businesses falling in the category of micro-enterprises.

●??????Funding raised by the startups which have at least one woman co-founder raised only 5% of funding in the year 2018-2020 and it shrunk to only?1.43% of the total investor funding?in the startup ecosystem when only women founders were considered.

Solutions

• The Government of India has taken various initiatives for women’s economic empowerment such as?the Stree Shakti package, Udyogini scheme, Mahila Udyam Nidhi scheme,?Stand Up India Scheme,?Mahila e-haat,?Mahila Bank, Mahila Coir Yojana. These initiatives are powerful catalysts to create more women led enterprises. Awareness campaign alongside elimination of red tape will ensure greater participation in such schemes.
• Women Entrepreneurship Platform (WEP) by Niti Ayog, Sequoia Spark Fellowship, Women Entrepreneurship & Empowerment Foundation by IIT, Delhi and many other programs offered by institutions must be promoted.
• Breaking gender stereotypes and ensuring equal footing for women entrepreneurs in Funding, Training, Reach and access to technology is critical.
• A change in cultural landscape where a female run business is cheered by the society can do wonders. Focus on outreach programs, support and education must be made a priority.?

If supported and encouraged, women led enterprises will drive transformational gains for individuals, the economy and society.

With a cohesive strategy and continuous support, government and the stakeholders can bring the new chapter of entrepreneurship in the country. An empowered woman uplifts the family, society and the economy; not just economically but culturally too. Women are ready; all we have to do is support them the right way.