Workplace safety key to get more women in labour force: IMF's Gita Gopinath

IMF's Gopinath wants govt to conduct cost-benefit analysis of PLI scheme

International Monetary Fund (IMF) Deputy Managing Director Gita Gopinath has condemned the rape and murder of a lady doctor in Kolkata as a terrible and disturbing incident.

"Personally, it is terrible to have any event of this kind. It is disturbing," she told Business Standard here.

"Leaving aside the impact of these incidents on the economy, it is absolutely critical and non-negotiable that Indian women should feel safe. Full stop," she asserted.

From an economic point of view, she said it is important to ensure women's safety at the workplace to raise India’s female labour force participation rate (LFPR), which is very low at present.

"One cannot raise that (female LFPR) without ensuring safety at the workplace and safety of women in getting to the workplace. That is absolutely critical," the India-born economist said.

Female LFPR stood at just 37 per cent for the age group of 15 years and above during 2022-23, though higher than 32.5 per cent in the previous year. Male LFPR, on the other hand, stood at 78.5 per cent during 2022-23 against 77.2 per cent in 2021-22.

Gopinath was here in connection with her participation at the Diamond Jubilee Conference of her alma mater—the Delhi School of Economics.

Production Linked Incentive (PLI) scheme:

The IMF Deputy Managing Director suggested that a cost-benefit analysis of the PLI scheme be conducted to ensure that it remains a temporary one.

She said it is a bit early to assess how the PLI scheme is working.

"Providing these kinds of incentives is something many countries are doing. Our advice to all these governments is that it’s important to do a cost-benefit analysis to make sure that in terms of fiscal costs, these are making a difference and are not too fiscally costly," she said.

It’s also important to make sure that these schemes are temporary and don’t happen on a continuous, ongoing basis, Gopinath sounded a word of caution.

The Centre announced the PLI scheme in three phases in 2020 and 2021 to provide financial incentives for 14 sectors such as pharmaceuticals, electronic and technology products, telecom and networking products, air conditioners, automobiles and auto components, and textile products.

Gopinath said her prescription on general structural reforms in terms of ease of doing business, judicial efficiency, and tax systems is going to be very important.

Earlier, at a fireside chat with 15th Finance Commission Chairman NK Singh at Delhi School of Economics on Saturday, she had emphasised that India should invest in creating a skilled workforce and undertake land, labour, and taxation reforms to meet its aspiration to become a developed country by 2047.

She had also listed the need to strengthen institutions to improve ease of doing business, have efficient judicial systems, and put in place better regulatory environments.

US Recession:

Gopinath said the IMF does not see a recession in the US under its baseline projections.

"We expect the economy to slow. We have projected 2.6 per cent (economic growth in the US) for the current year and then it will come down to 1.9 per cent for the next year. That’s what we should expect," she said.

She said this would have implications for some of its trading partners, especially those closely linked to the US economy.

Gopinath did not see any major impact of the slowing US economy on the Indian economy.

"We see the US economy slowing, but I don’t think that will have very negative implications for India," she observed.

She said the slowing down of the US economy is a part of bringing down inflation.

"We see signs of the labour market softening. So we should expect to see slower growth," the IMF Deputy Managing Director said.

She said it is more important for the US economy to cool down so that the Federal Reserve can start the process of normalising rates.