Women's entrepreneurship: Time for a holistic strategy

Combining financial support with empowerment is a must for more women to start businesses

- VIJAYSHREE JAYARAMAN & VIDHYA SOUNDARARAJAN

Over the past 25 years, the share of women-owned enterprises in the Indian economy has been steadily rising, a promising development amid the concerns surrounding low female labour force participation. We ask, what lies behind this growth? How large are these enterprises? Do they operate primarily in manufacturing or services? Are they concentrated in specific industries within these sectors? Crucially, what are the constraints faced by women-owned enterprises, and how can we fully tap the potential of such enterprises?

Data from the Economic Census (EC) of India shows a steady increase in women-owned enterprises between 1998 and 2013, both in manufacturing and services. We observe sharp growth particularly between 2005 and 2013, even among firms that have more than 10 paid workers. We combine data from older rounds (2010 and 2015) with the most recent rounds (2021, 2022 and 2023) of the unorganized sector enterprise survey, with the caveat that these primarily cover informal, unregistered enterprises. Here too, we observe an upward trajectory of own-account enterprises and those with more than one worker in manufacturing and services both. Within manufacturing, the increase in women-owned enterprises is mostly in select industries, namely tobacco, food and beverages, paper and chemicals; for services, the growth is led by sectors like education and other personal services.