The Maternity Benefit Act – A Perspective

My take on the new #‎MaternityBenefitAct : “As someone who has been witnessing the progress of Diversity & Inclusion from a nascent science to a competitive talent strategy of companies, I am delighted to note that there is a strong possibility that mandated maternity leave to be offered by companies is being raised to 26 weeks. This will surely prevent at least 20% of regretted attrition of women in the age group of 25 to 35, being faced by organizations. It also takes India right up in the rankings (way higher than the US, Japan, Switzerland, Belgium, Finland, France and a host of other countries) as regards maximum paid leave for maternity. I am equally thrilled that adoption leave of 12 weeks is also available.

I have two concerns though

1) Only a grand total of 25.5% of all employable women are in the Indian workforce. They would range in the age group of 25 to 60. Of this group, a policy such as this, will address itself to about 35% of the leave-needs of the population. This shrinks the total number of beneficiaries to a rather small figure. On the other hand, if the government were to encourage companies to hire more women by providing incentives for such hiring (ala Japan, which actually gives Tax rebates for the hiring of second career women) you might find the number of 25.5% jumping up by about 10 percentage points.

2) By asking companies to bear the load of 26 weeks paid maternity leave, the government might actually end up antagonizing the intentions of small and medium enterprises, which are among the largest employers of women currently. An NSSO report shows that close to 38% of women who are currently in the workforce, are employed by small and medium enterprises. There is a serious danger of these companies either NOT taking on women on full-time, on-roll positions (since they then have to pay 26 weeks of leave) or, even more dangerously, give up the hiring of women due to this load on their cash flow. I am keen to know what the government will do to address both these issues”.

By Dr. Saundarya Rajesh

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