Policy Update
Ilma Ahmad Samir
Introduction
The Maternity Benefit (Amendment) Act, 2017 has been a significant milestone in India’s Labor welfare framework, especially for the women working in the formal sector. In order to amend the already existing 1961 legislation, the Act extends paid maternity leave from 12 to 26 weeks for women with less than two surviving children. The Act also introduces new provisions such as maternity leave for adoption and commissioning mothers, creche facilities in establishments with 50 or more employees, and work-from-home option post-leave.
The changes in the Act aims to promote gender-inclusive workplace and support maternal and child health. Nonetheless, implementation challenges and the Act’s limited reach in the informal sector has sparked debate over its inclusivity and effectiveness. This article reviews the key provisions, implementation gaps, and potential policy pathways for making maternity benefits more equitable and comprehensive in India.
Background
India’s commitment to supporting working mothers dates back to the Maternity Benefit Act of 1961, which provided 12 weeks of paid maternity leave to women employed in the formal sector. Nevertheless, with the changing workforce dynamics, increased female participation, and global best practices, the need for a more inclusive framework became evident. To mitigate these challenges, the Maternity Benefit (Amendment) Act, 2017 was enacted to strengthen protections for women. The amendment was a significant step towards aligning India’s maternity policies with the standards set by the International Labour Organisation (ILO), according to which there should be a minimum 14 weeks paid leave.
The 2017 amendment increased the paid leave to 26 weeks, the third highest globally at the time. It also introduced provisions like maternity benefits for adoptive and commissioning mothers, work-from-home options, and mandatory creche facilities. While the move was welcomed for promoting gender equity and maternal health, it also raised concerns, particularly among all the small and medium enterprises (SMEs), about the financial burden and lack of cost-sharing mechanisms. With 90% of the working women employed in the informal sector, the Act’s reach remains limited as it excludes all other genders, like the transgender persons, gender non confirming persons, etc,. This background sets the stage further to explore the policy’s impact, implementation barriers, and required reforms.
Functioning of the Policy
The Maternity Benefit (Amendment) Act 2017, operates as a protective labor welfare measure aimed at securing health and the well-being of the working women and their children. It applies to all the establishments employing 10 or more persons, including factories, mines, plantation, and shops, among others.
The policy ensures that eligible women are entitled to 26 weeks of paid maternity leave for their first two children, and 12 weeks for subsequent deliveries. Women adopting a child below 3 months or commissioning a child through surrogacy are also entitled to 12 weeks of paid leave.
One major functional feature includes the obligation of the employers with 50 or more employees to provide creche facilities within a prescribed distance, allowing mothers daily four visits to the creche. Additionally, the Act encourages work-from-home arrangements, subject to mutual agreements, to ease the transition back to work.
The policy is enforced by state labor departments, and employers are responsible for full wage payments during the leave period. However, no reimbursement or cost-sharing support is provided by the government, which places the financial burden solely on employers. This has led to mixed outcomes in implementation, especially in the private sector, where compliance varies significantly.
Performance
The 2017 Act has made a notable policy shift in recognizing maternal health and workplace rights. However, in reality its performance reveals a gap between legislative intents and on-ground outcomes.
Some progress has been seen in the formal sector:
- There has been marked increased awareness of maternity entitlements among women in organized employment.
- Extended paid leaves policies have been adopted by many large corporations.
- Introduction of work-from-home options and creche facilities by select compliant employers.
Despite the aforementioned progress, several critical shortcomings have emerged such as:
- High cost burden on employers, especially SMEs, with no cost sharing mechanism.
- Poor compliance with creche provisions due to lack of regulatory oversight.
- Gender bias in hiring, as employers seek to avoid the financial implications of maternity leave.
- Limited implementation in Tier 2 and Tier 3 cities, where awareness and enforcement are weaker.
Notably, the Act does not cover working women in the informal sector, who constitute the majority of India’s female workforce. Their access to maternity protection remains reliant on scattered and inconsistent schemes such as:
- Jan Suraksha Yojana (JSY):
A centrally sponsored scheme under the National Health Mission that provides cash incentives to promote institutional desires among pregnant women from low-income groups, aiming to reduce maternal and neonatal mortality.
- Pradhan Mantri Matru Vandana Yojana (PMMVY):
A maternity benefit scheme offering Rs. 5000 installments to eligible pregnant and lactating women for the first live birth, intended to partially compensate for wage loss and support safe delivery and nutrition.
The schemes aim to provide financial assistance for pregnancy and institutional deliveries, they operate as welfare schemes for low-income women and do not guarantee employment-linked benefits. This creates inconsistency with the Maternity Benefit Act, which focuses on formal sector employees, leaving a large gap in coverage and protection for most working women.
Hence, while the Act is progressive in spirit, its performance remains constrained by coverage limitations, weak enforcements, and absence of state-supported implementation frameworks.
Impact
The Maternity Benefit (Amendment) Act, 2017 has had a mixed impact on India’s labor landscape progressive in legislative scope but uneven in outcomes. Some of its positive impacts are highlighted below:
- Improved workplace practices in many large MNCs, with increased maternity leaves. Organizations like Microsoft India, Infosys, and PayPal have implemented support beyond the statutory requirement of 26 weeks. For instance, Microsoft provides optional extended leave, flexible work arrangements, and dedicated wellness support and crèche facilities, signaling a positive shift in corporate maternity support.
- Health benefits for the infants. The extension of postnatal leave has reduced pressure on women to return to work prematurely: while not directly measured in studies, employer-supported initiatives at these firms have often reported better retention and employee satisfaction after childbirth.
- Formalization of employment and job security. Although the policy aimed to boost women’s workforce participation, a TeamLease study estimated a net job opportunity loss of 0.9 to 1.4 million women in FY 2020, compared to earlier years, citing resistance to extended paid leave among SMEs and hiring freeze for women of childbearing age.
However, the overall impact is limited due to:
- Low policy penetration in the informal sector, where women lack secure employment and maternity coverage. Real-world accounts highlight the exclusion of informal workers.
- Increased gender bias in hiring. A TeamLease survey showed that over 50% of male respondents believed maternity leave policies led to increased bias, especially in hiring. Employers in certain sectors reported reluctance to hire women to sidestep associated costs.
- Crèche provision largely unimplemented. Despite mandates, national compliance remains weak. As of 2020, only a few states including Karnataka and Tamil Nadu had notified rules for enforcement. A study found nearly half of employers found the requirement “challenging,” and many still ignored the crèche mandate due to unclear guidelines and lack of penalties.
The Act has brought visibility to maternity rights, its impact on improving equity and long-term workforce participation among women remains constrained without broader reforms and inclusion mechanisms.
Figure 1: Top 5 Maternity Challenges
Emerging Issues
The Maternity Benefit (Amendment) Act, 2017 is a landmark in labor welfare; however, its implementation has revealed significant policy gaps and structural issues that hinder its broader impact.
A major concern is the narrow focus on formal employment, leaving the vast informal workforce where most Indian women are employed outside its protection such as domestic work, agriculture, or home-based industries.
Moreover, the financial burden on the employers, especially in MSMEs, has had unintended consequences. For example, a 2019 report by TeamLease Services noted that 26% of surveyed companies admitted to hesitating to hire women post-amendment due to extended paid leave provision.This raises concerns that the Act may inadvertently reinforce the very gender discrimination it sought to address.
The creche provision is well intended, but remains largely unimplemented. A study by the Indian Council for Research on International Economic Relations (ICRIER) found that only a fraction of eligible companies had set up functional creche, citing lack of space, resource and regulatory clarity.
In addition to it, lack of awareness among eligible women especially among semi-urban areas, combined with absence of a centralised monitoring or grievance redress system, hinders the policy reach and accountability.
Another critical concern lies in the law’s underlying gender assumptions. By focusing solely on maternity, the Act reinforces the notion that childcare is primarily a woman’s responsibility, overlooking the role of fathers and other caregivers. There is no provision for paternity leave or for ensuring crèche facilities near the workplace of fathers, despite the growing number of single fathers and dual-career households. This reflects a patriarchal bias in caregiving policies and limits progress toward more equitable, family-oriented workplace reforms.
These issues underscore the need for inclusive reforms, shared financial borders, and institutional oversight to bridge the implementation gap.
Way forward
In order to make the Act more inclusive and impactful, a multi-pronged policy revision is essential. Firstly, the government should consider reducing a cost-sharing model – similar to countries like Germany and Australia where maternity leave is partly funded through social insurance or public schemes, reducing the burden on employers.
Second, extending maternity protection to informal sector workers through integration with the schemes like PMMVY or through a universal maternity benefit framework is critical. Special provisions can be introduced for sectors with high female participation, such as domestic work or self employment.
Global examples offer valuable lessons: Countries like Sweden provide gender-neutral parental leave (480 days), shared between parents, while Norway mandates a portion for fathers. India must move beyond viewing caregiving as solely a mother’s responsibility and extend these facilities to not just heteronormative working women but also to people of all genders who have children, including men and transgender persons. This calls for an inclusive, gender-neutral caregiving law, enabling shared parenting and reducing the burden on women.
Finally, clear guidelines, incentives for compliance, regular audits, and a central monitoring mechanism can strengthen enforcement.
A gender-equitable workforce demands not just progressive laws, but also institutional, financial, and structural support to translate them into tangible outcomes.
References
- Ministry of Labour and Employment. (2017). The Maternity Benefit (Amendment) Act, 2017. Government of India. https://labour.gov.in
- Government of India. (2017). The Maternity Benefit (Amendment) Act, 2017 – Gazette Notification. Ministry of Law and Justice. https://egazette.nic.in
- International Labour Organization. (2014). Maternity and paternity at work: Law and practice across the world. ILO. https://www.ilo.org/global/publications
- TeamLease Services. (2019). Maternity Benefits Act impact study: Hiring trends and employer perspectives. https://www.teamlease.com
- Indian Council for Research on International Economic Relations (ICRIER). (2020). Employer compliance with maternity benefit provisions in India. https://icrier.org
- UN Women India. (2020). Gender and employment: Challenges for women in the informal sector. https://india.unwomen.org
- The Hindu. (2019, March 12). Employers wary of hiring women post maternity law. https://www.thehindu.com
About the Author
Ilma Ahmad Samir is a postgraduate in Political Science and a UGC-NET qualifier. She is currently serving as a research intern at IMPRI and is also a research fellow under the DFPGPYF Cohort 2.0. Her research interests include policy analysis, foreign policy, diplomacy, international relations, digital governance, and technology-driven administrative reforms.
Acknowledgement
The author extends her sincere gratitude to the IMPRI team and Ms. Aasthaba Jadeja for their invaluable guidance throughout the process.
Disclaimer:
All views expressed in the article belong solely to the author and not necessarily to the organization.
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