Economic Cost of Exclusion

— Neeraj BR

When I came to Chennai in July 2019 to join IIT Madras, one of the first people my father and I encountered on the street was a trans woman. She started circling us, my father took out his wallet to give her some money. Suddenly, she snatched his wallet but said, “Kavala padaathinga saar. Naan itha thirudayellam maaten” (Don’t worry, sir. I will not steal this). She then took a five hundred rupee note from the wallet, gave the wallet back and went away. Her statement sums up the LGBTQ+ situation in India even after the abrogation of Section 377 cases of vulnerability and victimization. The abrogation removed only a legal barrier for the LGBTQ+ community, not the vast majority’s biases and prejudices and the consequences. Issues of LGBTQ+ discrimination are almost always analysed from a socio-cultural lens. However, the matter can also be examined from an economic perspective, to gauge what India stands to lose from this.

India’s discrimination against potential Pink Dollars

India’s discrimination against the LGBTQ+ community can be traced to its colonial-era attitudes towards transwomen, who were among the first victims of colonial-era attempts to ‘control morality’. Aftereffects of such measures, like a 19th century penal code prohibiting ‘carnal intercourse against the order of nature’, has shaped public opinion such that it continues to haunt the LGBTQ+ community.

Members of the LGBTQ+ community tend to become easy targets of discrimination. Expression of their sexuality and gender occurs through performance which makes it difficult for them to shed their identities. In interviews, trans people are often told that a particular job is for a particular sex, and that they do not ‘fit into a particular sex’. Left with no economic or social support, and often no education, trans people enter the economically vulnerable fold resorting to exploitative activities such as begging, prostitution.

Most LGBTQ+ members keep their sexual orientation under wraps out of fear as they are not made to feel comfortable in conversations about sex life and sexual partners. Revealing one’s sexual orientation is still a make-or-break moment for the LGBTQ+ community concerning their prospects in education and employment.

Those LGBTQ+ members who proudly reveal their sexual orientation face unfavorable environments tasteless jokes and indirect comments about sexual orientation to physical and mental abuse like cornering them in private spaces. This prevents the LGBTQ+ community from bonding well with their straight peers, making it difficult to do simple tasks like conducting professional communication. A 2013 survey pointed out that 56% of all college-educated, white-collar LGBTQ+ members in India faced workplace discrimination because of their sexual orientation.

The simultaneous discrimination of the LGBTQ+ community in education, social settings and employment significantly impacts India’s human capital investment and the contribution of pink dollars to the Indian economy. By favoring less productive people for being ‘straight’ over more productive people for being LGBTQ+, the overall inefficiency and the loss of output increases substantially. Workplace discrimination creates an unfavorable working environment for the members of the LGBTQ+ community, pushing them into unemployment or underemployment. This brings down their productivity and pushes them into poverty.

Quantification of India’s loss of Pink Dollars

The losses India has faced from LGBTQ+ discrimination have been quantified by Dr M V Lee Badgett, one of the foremost scholars on the links between economics and LGBTQ+ issues. In a panel discussion co-sponsored by UN AIDS and the World Bank, Dr Badgett estimated that India lost up to 1.7% of GDP in a year due to homophobia. India faced costs up to $31 billion because of loss of labor productivity due to employment discrimination and loss of life years due to early deaths and disability in the LGBTQ+ community. A 2018 study co-authored by Dr Badgett showed that a one-point increase in a country’s Global Acceptance Index (GAI) would mean a $1506 increase in the GDP per capita. However, Andrew Flores brings bad news for India; his 2019 study shows India’s GAI has fallen from 5.1 in 2000-3 to as low as 4.2 in 2009-13, before rising to 4.5 in 2014-17. Dr Badgett co-authored a 2019 study that showed that a country would gain an over-$2000 increase in GDP per capita if its performance in the Global Index on Legal Recognition of Homosexual Orientation increases by one point. Unfortunately, India’s score lay between 0 and 1 on the 8-point index when calculated for 2011.

The road forward

India’s path to LGBTQ+ inclusivity lies in its efforts on gender sensitization. Governments at the centre and states have initiated measures for the inclusivity of trans people, like the Transgender Persons (Protection of Rights) Act, 2019, and the establishment of welfare programs and benefits and medical boards by various states to assist the trans people. Governments can take inspiration from Indian companies in LGBTQ+ inclusion. Companies are making headway through mandatory gender sensitization programs, emphasizing using the correct pronouns, accepting others’ preferred sexual orientation, a zero-tolerance policy towards LGBTQ+ discrimination and a dedicated Diversity & Inclusion team. Infosys has a resource group called IGLU (Infosys Gays, Lesbians and You) that brings together its LGBTQ+ employees. Intuit, a Bengaluru-based IT company, has a Pride Network and advocates creating safer spaces for LGBTQ+ employees. Its inclusivity policies have given it 100% ratings on the Corporate Equality Index of Human Rights Campaign for many years.

Therefore, it goes without doubt that India is moving in the right direction in LGBTQ+ inclusion. However, it should use more resources to incorporate the LGBTQ+ community into the workings of the economy and tap into the pink dollars’ potentials if it is to become a $5 trillion economy by 2024-25.