November 9, 2003
New Delhi

PM's inaugural speech at the ~Gender Poverty Summit~

~I am pleased to be with you this afternoon at this very important conference. I see your conference as being important for two reasons. Any meaningful activity that focuses our attention on poverty is important because eradication of poverty continues to be the biggest challenge before our nation. But its importance is enhanced by your commendable effort to highlight the gender aspect of poverty.

Poverty hurts. It hurts poor women more.

But this is only one part of the truth. The other part is that in spite of suffering more under poverty, women can play a bigger role in eradicating poverty and making the life of the family and society better, if they are empowered.

It is well known that women’s creative power is far more benign and far more uplifting than men’s. I for one have never ceased to be amazed at the extraordinary qualities of women in general but especially poor women – their capacity to face odds, their ability to find solutions to the problems of daily life, their caring and cooperative approach to others, and their interesting management capabilities. Just see how even an illiterate woman works as a good manager, when it comes managing her meager household budget despite all constraints. When a man has a little surplus in his pocket, he normally spends on himself. A woman spends it on the family.

Thus, when women create material value through their economic activities, they also add to the social and moral values of life. These are the great qualities that have made women the main carriers of culture and the main sustaining force of civilizations.

Therefore, our fundamental approach to Gender and Poverty should be such that we view women not only as a part of the problem of poverty, but also as a part of the solution – indeed, a very important and unique part of the solution.

Today it is all too obvious that, to find an effective solution to the problem of poverty – including poverty-related problems of women --, we have to mainly rely on the informal sector of our economy. This is true not only for India, but almost all the developing countries in the world.

The general assumption in the 1950s and the ‘60s was that the problem of poverty and unemployment could be dealt with by mainly promoting the growth of industry and agriculture through the right mix of policies and programmes. It was also assumed that, over a period of time, the traditional sector comprising cottage industries, small trade, etc., also would get absorbed in the formal sector of the economy.

This assumption has not stood the test of time. Today neither the government sector nor the organized industry can generate significant number of employment opportunities, although both are crucial for raising the growth rates of the economy higher. Even in rural areas, much of the employment is no longer directly farm-based. Both in urban and rural areas, informal services, informal production and informal trade have become the main sources of employment, self-employment and entrepreneurship. Hence, the informal sector of the economy should not be viewed as a marginal or short-term phenomenon. It is here to stay.

It is estimated that 93% of India’s total workforce – that is, 370 million – is now in the informal sector. And one-third of workers in the informal workforce are women – vendors of fruits and vegetables, bamboo workers, makers and sellers of diyas during Diwali, rag-pickers who make a useful contribution to the recycling business, and an incredibly wide range of economic activities.

We should also recognize that the size and the scope of the informal sector have vastly expanded – not shrunk – because of the forces of liberalization and globalisation. For example, the rate of outsourcing that we see in this sector greatly overshadows the outsourcing in the IT sector. Yet, it remains in the shadows because it does not get reported, analysed and highlighted in the same way as outsourcing in IT.

We have to admit that our system as a whole is not yet adequately sensitive to the problems and prospects of this very important part of our economy. I specifically mention the word ~prospects~ because we have not yet paid sufficient attention to the wealth and assets being created in this sector. There are economists who argue that the enormous amount of value created in this sector is not fully reflected in our national statistics because most of this economic activity is not registered, not accounted and not measured in any formal way. They also argue that by providing a proper legal status and basic infrastructure and institutional support, even a tiny enterprise can become more productive and employ more people.

Today the informal sector is associated with low incomes, low – very low legal protection --, low credit provision, low education, low inputs of science and technology, and above all very low voice in the media and governmental structures. This sector is also characterized by high instability, high risk and high vulnerability. And poor women are far more vulnerable to harassment and apathy of the external environment than men.

For example, all it takes for a roadside vendor to find a heart-breaking hole in her hard-earned income is for a petty employee or officer to collect his weekly or monthly extortionist hafta from her. Poor men also face these poverty-accentuating excesses, but poor women find themselves far more helpless in such moments, when their basic right or earning a livelihood is infringed upon.

Therefore, the challenge before all of us who have gathered here is this: how to evolve a holistic and effective strategy to transform the informal sector into the main driver of income-enhancing and life-fulfilling opportunities for employment, self-employment and entrepreneurship. I would say that this strategy has to become central – and not a peripheral – part of our Agenda of Economic Reforms in the coming times.

In the past few decades, both the government and non-governmental organizations in India have tried to address this issue. A lot of useful experience and knowledge has been gained. Many successful interventions have been made. For example, I think that our successes in micro-financing have not been adequately projected – either inside or outside the country. Our banks have supported more than one million Self-Help Groups so far. The most successful among them are those run by women.

The Rural Employment Generation Programme of the Khadi and Village Industries Commission has provided financial and institutional support to a large number of women entrepreneurs. We have many social security schemes for the unorganized sector, and we shall soon expand their scope in a comprehensive way. I must also acknowledge here the good work of the National Women’s Commission and the Central Board of Social Welfare in highlighting the issues of women’s employment and development in the informal sector.

Organisations like SEWA have been doing praiseworthy work in supporting women artisans and entrepreneurs. In addition, there are also thousands of other NGOs spread across the length and breadth of our vast country who are engaged in securing the rights and improving the conditions of the poor in the informal sector.

Poverty has indeed reduced significantly as a result of economic reforms. I have also observed that excellent results are achieved wherever the local administration, banks, NGOs, Self-Help Groups, and small entrepreneurs have worked closely together.

Nevertheless, our successes in this field are small so far compared to the enormous challenge we face. As I said, we need a holistic and scalable strategy to fully realize the poverty alleviation potential of the informal sector. We should remember that what works in one place and one part of the sector does not necessarily work in another place and another part. Therefore, our strategy has to be suitably decentralized and differentiated.

I therefore suggest that the Ministry of Finance, in collaboration with other ministries, banking and financial institutions, and non-governmental agencies, prepare a broad Action Plan for promoting the poverty eradication potential of the informal sector. Gender issues should be a specific focus of this action plan. Naturally, in doing so, we should suitably incorporate the successful experience of other countries in this field.

I shall conclude my remarks by emphasizing one all-important point. We may have the best of policies, programmes and action plans. And we must have nothing but the best ones. But we must also remember that these will work only when those who implement them have a little care and compassion for the poor, when they have a feeling for the suffering of women, when they understanding the tremendous creative power of ordinary women, and when they realize the nobility and destiny-changing potential of their work.

I heartily congratulate the Women’s Political Watch, National Council of Applied Economic Research and other institutions for organizing this ~Gender Poverty Summit~. I inaugurate this conference by extending to all of you my best wishes.

Thank you~.