Its generosity comes with a downside.
The new policy ranks among the world’s most generous maternity leave benefits. If India was an OECD country, it would land at No. 6, alongside Israel and Poland, for longest paid leave. Only the U.K., Greece, Ireland, the Slovak Republic, and the Czech Republic offer new mothers more paid time off among that subset of nations.
India’s longer maternity leave was introduced, in part, to make the country’s working world more inviting to women. Only 27% of Indian women work, according to 2012 statistics (the latest available), and that deficit costs the country an estimated 2.5 percentage points of gross domestic product per year. Prime Minister Narendra Modi called the law a “landmark moment in our efforts towards women-led development.”
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There was already some criticism of the policy. It only applies to new mothers—not fathers—and only to women who work in “organized labor,” meaning it’s not available to the 16 million women who are either self-employed or work from home. And now, new research indicates that the new policy could wind up having a detrimental effect on the women it’s supposed to aid. Local Circles, a citizen engagement social network, surveyed more than 4,300 entrepreneurs, startups, and small and medium firms about the new law. The results aren’t pretty.
Thirty-five percent of respondents said the new policy will have a negative result on their business ecosystem in terms of cost and profitability, 10% said it would not prompt any changes at their company because they have no female employees, and 39% said the law will have a positive effect as it will lead to a happier workforce. The remaining 16% aren’t sure of the outcome.
The survey also asked respondents how the new law will alter their hiring practices. Forty percent said they will still hire women, but will consider whether the cost of a potential maternity leave is “worth the candidate.” Another 26% said they will prefer male candidates because of the new law, while 22% said they anticipate no change in their hiring approach (12% didn’t answer the question).
The results bear out the concerns that often accompany mothers-only maternity leave policies: that such benefits add to the cost of hiring women and therefore encourage companies to hire male candidates—who don’t have access to paid leave—instead.
That argument was leveled against U.S. President Donald Trump when he introduced a maternity leave plan on the campaign trail in September that only covered new mothers. Since then, he’s used broader language when referring to paid leave, which seems to signal that he will include all new parents in any official White House proposal. The survey figures out of India are one indication of what could happen if he doesn’t.