Maternity Leave extension policy comes in to effect in India

In August 2016, Maternity Benefit (Amendment) Bill which is the official reformation of the Maternity Benefit Act, 1961 was passed at the Rajya Sabha which states that amount of paid maternity leaves have increased to 26 weeks in India from 12 weeks earlier on. It is a mandatory step to be taken up by the factories, mines and plantation as well. It has also increased the limit of paid maternity leaves before delivery from 6 to 8 weeks. This legislation applies to any establishment which has employee strength of more than 10 people and can be availed by employees who have worked in the organization for at least 80 days in 12 months preceding the date of the delivery. There is another segment of the law which is under discussion at current times related to the commissioning and adopting mothers. It proposes 12 weeks leave for them. The segment also includes providing crèche facility when the employee count is 50 or more.

With current reformation to the Maternity policy, it is essential to look in to maternity leave scenario at other countries.

  • Sweden tops the list when it comes to maternity leave policy. It has 56 weeks of paid maternity leave with 80% pay guaranteed. The leave can also be extended by 13 weeks in case of necessity with a fixed salary rate to be decided between the employee and management. Paternity leave is 34 weeks to new parents and same gender couples can apply for the leaves accordingly.
  • Croatia is next in line with 24 weeks of maternity leave accompanied by full pay. It also has the provision of additional 34 weeks to be added to the leave duration at a negotiable salary rate. There is 34 weeks of paternal leave as well.
  • United Kingdom has 52 weeks of maternity leave in which 26 weeks are compulsory and rest is additional. In first 36 weeks, the pay given is up to 96%. The paternity leave is 26 weeks as well.
  • In Canada, duration of maternity leave is dependent on the employment history and average working hours which extend from 17 weeks to 52 weeks. Average salary paid is usually 55% of the total amount but in certain cases it might go up to 80%. Paternity leave is up to 35 weeks.
  • United States of America does not have any maternity leave structure as such. There is only provision of 12 weeks of unpaid leaves.

Hence it is evident that while there are many countries providing better maternity leave than India, there are certain developed countries like USA who lag behind.

While this initiative of India has been praised by many, there are certain concerns to it as well. Some experts believe that maternity leave scheme will impact the career growth of female employees since they miss out on office for a long stretch during this period and their previous contributions may not be acknowledged. Secondly, this implies to the organized sector which employs only 10% of the women. The rest 90% would not be able to gain the benefit of this policy. Hence, it is yet to be seen what impact it has on the workforce structure as a whole in India.

India to become third largest economy by 2020

According to published sources in the first quarter of 2016, India marked an expansion of 7.3% GDP in the last quarter of 2015. This development has made the country as one of the fastest growing economies in the world. This has been a positive impact as the GDP increase has been significant compared 6.6% during last quarter of 2014. On the other hand, China’s GDP has slipped by 6.8% during last quarter of 2015. Hence investors have been turning their interests towards various sectors of India. There are several factors which have influenced this development on a large scale.

  • One of the primary factors contributing to this fast paced growth is attributed to the fact that India is a net importer of oil and decrease in oil prices have resulted in bringing down the inflation to a great extent.
  • India has a population of 1.2 billion, of which 50% consists of people within the age group of 25 years. By 2020, it is expected to be one of the youngest population countries in the world which is likely to serve as an advantage to the consumer and tech companies. At the same time, China is struggling with the aging population and a slower fertility rate.
  • Political and legal framework in terms of reforms has been positive towards country growth as a whole.

With all these positive scenarios, there are certain sectors which are likely to become the highest employment zones between 2016 and 2020.

  • The frontier in this regard will be the Information technology sector. It has contributed to the rapid transformation of Indian economy. It is expected that the industry will reach USD 225 billion by 2020 with an employee count of 30 million during the same period. The outsourcing segment in this industry is also likely to reach USD 2.5 billion. The payment structure is anticipated to be the highest in this sector.
  • The telecom industry is next in line in this regard. Currently, the mobile phone subscription count of India passed 1 billion at the beginning of 2016. Moreover, the smartphone penetration rate is 26.3%. These statistics show a significant growth of this industry which is expected to continue in the coming five years.
  • Healthcare segment is one of rising stars of employment that contributes significantly to India’s GDP. More than 40 million jobs are expected in this segment in the coming five years. Medical tourism is on the rise in India and domestic market potential looks eminent.
  • Infrastructure segment is the fourth largest in the country and has been accounted for as second fastest growing industry. Though this segment is highly fragmented it is expected to register a growth rate of 7% to 10% in the coming years boosting employment.
  • The last but definitely not the least is the retail segment. 100% FDI, online e-commerce, mobile payments and convenience has worked towards its steady development. The projection says that the workforce in this segment is expected to double up by 2020.