The June issue of Finance and Development, the quarterly magazine of the International Monetary Fund (IMF), has an important article on gender budgeting, a subject that has been engaging our policymakers for quite some time.
While data on the relationship between reduction of gender inequalities and economic growth is sparse, there are certain axioms that appear to be true across countries. For example, in societies where women have a greater share of control over domestic spending, they are likely to orient expenditure more towards the welfare of the children and for domestic necessities. It is also true that women have different savings preferences compared to men. The large number of self-help groups that have become a feature of our micro-credit initiatives clearly demonstrate that women’s groups have a better repayment profile. There is also evidence that these groups have engendered a habit of thrift.
It is also generally accepted that financial freedom and control over choice of expenditure gives the woman a much larger public voice. During the 2004 elections, there was an attempt in the southern states to garner these self-help groups to one political cause or the other, in the hope that gender- oriented groups would help cut across caste lines. There is little evidence that this succeeded; however, it is true that there was considerable participation of these groups in election activities, and that this was an articulation of their arrival in the public arena.
It is also evident that where women are better educated, there is dramatic improvement in their employment opportunities. In South-East Asia, particularly in Singapore, Thailand and Vietnam, the past two decades have seen employment opportunities for women multiply. In India, the North-Eastern states and Kerala boast high levels of education among women, and their participation in economic activities of various kinds is evident.
Finally, several studies have shown that improvements in rural female literacy correlate well with improvements in child health, reduction in infant mortality, as well as nutrition and sanitation.
There is, however, little evidence that mere presence as an economic decision maker would immediately grant relief from the myriad social and cultural inequities that women suffer from, even in urban households. At best it can be argued that economic freedom is likely to lead to social freedom, and a more “level playing field”.
In India, there have been attempts to correct gender imbalances through macroeconomic policymaking. Gender budgeting is an attempt to mainstream budget-spending with gender in mind, and attempts to allocate shares of individual programmes for women. This exercise is carried out at the level of the Planning Commission, in individual states, and also forms part of the budget exercise of the government of India. The practice has been in vogue for over a decade, with interest in the exercise ebbing and falling with the interest of different political parties at the helm of affairs.
The IMF paper points out that more than 40 countries prepare a gender budget, and that Australia was among the earliest to go in for gender-budgeting, in 1995.
The problem with this approach has been that it has been difficult to evaluate expenditure effects. This is in part due to the lack of a tracking mechanism that traces utilization of funds down to the rural level, and equally due to insensitivities in the development of the programmes ab initio, that do not take gender sensitivities into account. In most cases, it is reduced to a bookkeeping exercise.
A real attempt to remove inequalities needs, therefore, to focus on the impact of the programmes on the target population, with a clear measurable target at the end. If there is evidence that girls have a lower enrolment rate than boys, and the goal is to equalize this rate, then the intervention could be in the form of a budgeted subsidy to parents who send their daughters to school, and the measurement indicator could be the improvement of the ratio of boys and girls in primary education.
Why am I writing all this now? Because I believe that rather than going in for caste-based distinctions for access to economic activity, education and the such, gender-based choices are likely to lead to quicker and more permanent benefits—in terms of improvement of livelihoods as well as social welfare. If only the gender-budgeting that happens as a ritual could be converted to a focused, measurable approach for the improvement of the economic lot of women, the impact on rural incomes and livelihoods would be substantial and immediate. With the levels of public expenditure in rural areas accelerating, this would be putting the funds to effective use.
Hopefully, this would also lead to reductions in the social inequities that women suffer.
S. Narayan is a former finance secretary and economic adviser to the Prime Minister of India. We welcome your comments at firstname.lastname@example.org