March 15, 2013

All Women Bank in India


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The 2013-14 Budget, as introduced by the Finance Minister, has gone beyond aspects of inclusive growth and sustainable development; it has reinforced the need for women empowerment – especially among the non-elite, middle-class working women in India. The Budget is as generous as it is unsurprising – generous because it earmarked government funds for the upliftment of women and unsurprising because women empowerment was an issue too dear for the government to ignore in light of the upcoming general elections in 2014, especially after the recent nationwide protests against the failure of the State in safeguarding the interests of women. With whatever objectives in mind, the historic decision of introducing Women Banks – first of its kind in India – in the public sector in particular and several other financial commitments to women in general is indeed commendable. But the devil lies in the detail.

Take for instance the proposed establishment of public sector banks specifically for women to cater to their entrepreneurial ambitions. The intention of the government behind this is undoubtedly bona fide but neither are gendered banks the need of the hour in India nor do they have the potential to address the multifaceted concerns of women for which they are proposed in the first place. The Budget is not only selective in its allocation of funds to women with entrepreneurial spirits but at the same time is also extremely vague in not defining the underlying objectives of the allocation; it is unclear as to whether the proposed banks would offer the benefits of their services at subsidized rates without any cap on the loans to be borrowed, or provide higher interest rates for fixed and saving account deposits, or even offer loans without any collateral securities.

But had this been the intention of the government, explicit words to that extent would have occurred either in the Budget or in the speech. As such, it is highly likely that the proposed banks will only provide general, but not special, banking services directed exclusively at women. Alternatively, the Finance Minister could instead have proposed for a few women-specific constructive changes in the existing public sector banks itself. The funds could have been put aside for offering interest-free loans to women or for extending loans to sponsor specific business related projects at discounted rates. The government could have equally considered offering of higher interest rates to banks for their savings and fixed deposits or the funding of banks so that they could provide educational loans to female students without any collateral securities.

The objective of women empowerment – as is patently noticeable from the speech of the Finance Minister – could rather be achieved by overcoming the shortcomings in the existing public sector banks which are constantly criticized for their failure in reaching out to the masses – especially those without a convincing background and influence – in need of exigent banking services. The same goes equally for the post office savings banks which, although successful in addressing the financial challenges in the rural areas, have lacked the capacity to provide full-fledged banking services in India. Now if this were the fate of certain existent banks, the services of the proposed banks will take decades to deliver banking services effectively to cater to the entrepreneurial needs of every woman.

The Finance Minister also proposed to contribute Rs. 1000 crores for the setting up of a ‘Nirbhaya’ Fund and promised to deal out Rs. 200 crores to the Ministry of Women and Child Development with the objective of ensuring a life with dignity and safety for Indian women. But the existence of the step – howsoever progressive and appreciative – on paper is one thing whereas its implementation by the government is quite another. In fact, instead of trying to allocate funds randomly in the name of women welfare, the money ought to have been channelized in a manner in which the immediate challenges faced by women in India could have been sufficiently addressed – importantly those relating to safety of women against crime and violence. This, together with the increase in the duty-free import of gold up to Rs. 100000 crores, come as classic examples in evincing a serious disconnect between the responses of the government and the present demands of Indian women.

A better approach, perhaps, to ensure safety of women would instead be to have a budget that is primarily focused on specific projects; the anxieties of women can only be overcome with realistic goals in mind and time-bound solutions in place. The government could have proposed, for example, for the establishment of all-women police stations or something even more specific like the installation of closed circuit cameras in every district or investing strategically in certain infrastructural projects. But the larger question that remains is why is it that the government has failed to contribute to women development cutting across women identities? In other words, why did the government not seem keen on establishing funds for granting scholarships to girls for higher education or in creating women-specific fast track courts or increasing existing funds specially designed for the rehabilitation of women or reducing tax rates and caps on women for the purposes of income tax law.

Not that the ideas behind the 2013-14 Budget are outright perverse but a lot more could have been achieved by strategically investing money in infrastructure and guaranteeing higher education rather than by promising cosmetic financial support which none had called for.

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