Maternity Leave Benefit: Modi Govt Plans Incentive Scheme for Employers

Maternity Leave
Maternity Leave Benefit: Modi Govt Plans Incentive Scheme for Employers

The amended maternity act has increased paid leave for women in India from 12 weeks to 26. But startups and SMEs are cautious in hiring women due to the extra financial burden. According to a survey conducted by LocalCircles, the resistance to recruiting women exists despite the govt offering to pay 50%, or 7 weeks, of the salary for the 14 weeks of extended maternity benefit, leaving cos to foot the bill for the remaining 19 weeks.

As per the Maternity Benefit (Amendment) Act, 2017 by the Modi government, the companies have to allow paid maternity leave of 26 weeks. Ministry of labour is now planning to reimburse 7 weeks leave with wages ceiling limited to Rs 15,000. It is estimated that the state exchequer will be burdened with Rs 400 crores to carry forward this scheme.

Why This Scheme Needs To Be Implemented?

Due to the Maternity leave rules, the private companies are hesitant to hire woman employees because if they are employed they may be entitled to receive 26 weeks of paid holiday. In addition, the Ministry of Labour and employment has also received complaints from women that if the company comes to know she is pregnant, her contract with the company is cancelled on flimsy grounds before they go for maternity leave.

Major Impact Of Maternity Leave Incentive Scheme?

With the implementation of this maternity leave benefit scheme the government will be at par with other developed economies and will garner recognition as being a country that motivates female employment and is responsive to the demands of working women.

As the partial cost will be borne by the government, the scheme, if implemented would prove to be a motivating factor for the employers as well as female employees. Apart from that, this scheme will help to generate more employment opportunities for woman and pave way for other benefits.

But the only disappointing factor of this scheme is it aims to cover woman employees whose monthly salary is INR 15,000. With the surging inflation and the increase in female employees, there are only a few women who are covered under this umbrella. Therefore, the wage limit should be exceeded to a threshold limit wherein the majority of woman employees could benefit from this scheme.

Having said that, the success of this scheme largely depends upon its effective implementation. The ministry should introduce a right plan of action in this direction.

Source: Finance Minutes

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