RIGHTFULLY OURS

Introduction

If work has value only when it is materially compensated, where does that leave the large majority of the nation’s women who work day and night to keep households running? – This debate moved beyond jurisprudential and academic discourse into the political arena, when a newly formed political party guaranteed salaries to housewives if they were voted to power. Indian courts are also often posed with this question, and have come up with the term “homemaker” to determine compensation, especially in motor accident claims.  While the recognition of homemakers’ labour in compensation claims marked an important development, courts have continued to rely on the concept of “notional income” to quantify such work. In practice, the amount assigned as notional income has varied across cases, and there is no statutory definition prescribing a uniform method for its calculation. This has resulted in differing approaches to valuing domestic labour, much of which is performed by women.

This explainer is divided into four parts. The first part describes how and why courts use the term homemaker, followed by an examination of the evolution of Supreme Court jurisprudence on valuing unpaid domestic labour. The third part analyses the concept of notional income, the methods used for calculating it, along with reasons why compensation falls below minimum wage benchmarks, while the final part looks at the consequences of undervaluation of unpaid care work, along with possible pathways for reform.    

How And Why Courts Use The Term Homemaker?

The Supreme Court and High Courts have used the term ‘homemaker’ as a means to address the gap in the Indian compensation framework. The legal framework governing compensation in motor accident cases is contained in the Motor Vehicles Act, 1988 which was enacted at a time when rapid motorisation was accompanied by a rise in road accidents. The legislation sought to create a more comprehensive and effective system for regulating road transport and compensating accident victims. The underlying rationale of the compensation regime is that individuals who suffer injury, disability, or loss due to motor vehicle accidents should have access to financial relief, even though monetary compensation can never fully restore what has been lost.

In fatal accident claims, courts assess compensation on the basis of “loss of dependency”—the financial contribution that the deceased would likely have made to their family had they remained alive. While this assessment is relatively straightforward when the deceased had a regular source of income, the death of a homemaker presents a distinct challenge because domestic labour and caregiving are generally unpaid. It is within this framework that courts have developed methods to account for the economic value of unpaid household work while determining compensation under the Act.

However, since the term ‘homemaker’ does not have any statutory backing, it functions as a proxy category, using which courts assign a notional or presumed income to unpaid labour. This raises  an important question – if unpaid domestic work can be compensated for after the death of the woman, why do the law and the society not value it during her lifetime?

This judicial approach has largely developed in motor accident compensation cases because courts are required to quantify the financial loss suffered by the dependents of a deceased person. While a salaried person’s contribution can be measured through income records, the death of a homemaker leaves no such benchmark. Courts therefore began assigning a notional income to unpaid domestic labour in order to calculate compensation, making compensation law the primary site for recognising its economic value.  Notional income, earlier defined in the Second Schedule of the Motor Vehicles Act, 1988, is a hypothetical or presumed income that is treated as actual earnings for specific legal or tax purposes. Put simply, it is income deemed to be earned, even when one has not actually earned it. It is a “legal fiction” established by statute to ensure compensation in statute. By recognising unpaid domestic labour through a monetary value, this stance points to a deeper constitutional tension: whether work traditionally excluded from formal economic measures should nevertheless receive equal legal recognition, especially in light of constitutional commitments to equality and dignity. It reinforces gendered assumptions, rendering a woman’s work as invisible during her lifetime.  Consequently, the central legal question has not been whether domestic labour has economic value, but how that value should be assessed within a compensation framework designed around measurable income and loss of dependency.

Evolution of the Supreme Court of India’s Jurisprudence on Valuing Unpaid Domestic Labour

Indian jurisprudence on valuing unpaid domestic labour has come a long way. The recognition of unpaid domestic labour in compensation law predates contemporary debates on equality. Prof. Prabha Kotiswaran identifies Abdulkader v. Kashinath (1966) as the earliest such case, where the court refused compensation to a widower because the value of his wife’s household services was considered offset by the costs of her maintenance, revealing the gendered assumptions that shaped judicial reasoning at the time.  The shift became more visible in Lata Wadhwa v. State of Bihar (2001), though the case itself did not arise under the Motor Vehicles Act. The dispute stemmed from a devastating fire at a function organised by the Tata Iron and Steel Company (TISCO) which resulted in many deaths. The petition was filed before the Supreme Court under Articles 21 and 32 of the Constitution seeking compensation for the victims and their families. While determining compensation, the Court was required to assess the economic loss suffered by the families of deceased homemakers. Rejecting the assumption that housewives were “non-earning” members of the household, the Court enhanced the value assigned to the services rendered by them and recognised that their contribution possessed measurable economic worth. This view of the Court was further strengthened in
Arun Kumar Agarwal v. National Insurance Co. (2010) and Kirti v. Oriental Insurance Company (2021).  In the former, the Supreme Court recognised that a homemaker’s unpaid household services have economic value and must be considered when determining compensation for her death, while the latter recognised homemakers as non-earning victims whose unpaid domestic labour can be assigned a notional income for calculating compensation. These judgments progressively viewed domestic work as intrinsically linked to dignity and equality, and highlight the development and continuing limitations of the judicial method of valuation. Recent judgements such as Vedanta Limited v. State of Tamil Nadu (2024) and Sunita v. Vinod Singh (2025), suggests that the courts are more willing than ever to acknowledge domestic work. Yet, as noted by Prof. Kotiswaran, compensation continues to remain inconsistent because the Court’s word on paper doesn’t always translate into practice. The problem is not simply whether unpaid domestic work has economic value, but how that value should be determined consistently.  The absence of  a clear statutory framework leaves courts to develop their own methods of valuation, which creates scope for variation in compensation. This gap points to the need for legislative interference to provide a more predictable and equitable framework for valuing unpaid domestic work, including a minimum benchmark and objective factors which may aid the court to calculate compensation.

Notional Income and its Valuation

The concept of notional income helps in translating the constitutional ideals of equality and dignity into monetary terms, making law a means to value unpaid work. Courts often use notional income to calculate economic contribution in cases of injury or death involving non- earning members like minors and homemakers.

Originally, courts majorly depended on the Second schedule of the Motor Vehicles Act, which set ₹15,000 per annum as notional income. This amount however, undervalued domestic work and could not keep up with inflation. The Second Schedule was omitted by Section 93 of the Motor Vehicles Act, 2019. Earlier, courts also used 1/3rd of the husband’s income as a benchmark. Courts have consciously moved from these methods and now use judicial principles and market estimates to decide notional income. Kirti v. Oriental Insurance Company (2021) reaffirmed that a homemaker’s notional income should cover future prospects, as well as the true value of their contribution. In spite of this, however, courts have still been conservative in their approach towards deciding notional income. Minimum wages are only indicative and not binding. This leads to income often falling below minimum wages, and inconsistent precedents. There is also a lack of statutory replacement, and the shadow of the Second Schedule still looms over the judges. Progressive principles have been established in theory, but the ground level is plagued by uncertainty, time constraints and caseload pressure.

The Implications of Undervaluing Unpaid Care Work

The valuation of domestic labour has consequences beyond individual compensation claims. Where courts assign low or inconsistent notional incomes, the economic contribution of homemakers may not be fully reflected in compensation awards, potentially affecting the financial relief available to dependants. The absence of a statutory framework has also resulted in differing judicial approaches to valuing similar forms of domestic work.

These challenges are linked to a broader issue concerning the social and economic recognition of unpaid care work. As sociologist Ann Oakley observed in ‘The Sociology of Housework’, domestic labour is often rendered “invisible” by being treated as a natural responsibility rather than work that creates economic value. This understanding has historically shaped both social attitudes and legal responses to domestic labour. The issue also has significant economic implications. An SBI report released in 2023 estimated that unpaid domestic work contributes approximately 7.5% of India’s GDP. Yet, much of this labour remains outside conventional measures of economic productivity and continues to receive limited recognition within legal and policy frameworks. Consequently, debates surrounding the valuation of homemakers are not confined to compensation law alone; they also raise broader questions about how the law and society recognise, measure, and account for unpaid work.

Conclusion: Towards a More Coherent Framework for Valuing Domestic Labour

Indian courts have progressively acknowledged that unpaid domestic labour possesses economic value and must be considered while determining compensation under the Motor Vehicles Act. However, the absence of statutory guidance on the calculation of notional income has left courts to develop their own methodologies, resulting in varied approaches across cases.

One possible reform is the introduction of legislative guidelines for assessing the value of unpaid domestic work. Such guidelines could identify relevant factors—including minimum wage standards, age, nature of household responsibilities, and inflation—while preserving judicial flexibility to account for the facts of individual cases. Greater consistency in valuation would not only improve predictability in compensation awards but also strengthen the law’s ability to account for forms of labour that fall outside conventional wage-based employment. The evolution of homemaker compensation jurisprudence reflects a gradual shift in how the law understands work, value, and dependency. Whether that shift translates into a more coherent and consistent framework remains an open question