India, the world's largest democracy and a rising economic powerhouse, has set its sights on achieving a $5 trillion economy by 2025. However, a critical piece of this puzzle remains underutilised - the female workforce. According to the World Bank, India's female labour force participation rate was a mere 19.2% in 2021, contributing only 17% of the country's GDP. Meanwhile, government data suggest a slightly higher figure of 25%.
Regardless of the source, it is evident that the number of women in the formal workforce continues to lag in a nation aspiring for economic greatness. This article explores how India can harness the potential of its She-economy to catalyse growth in the coming decades.
The Gender Lens on India's Economy
Experts agree that adopting a gender mainstreaming approach across all economic activities and policy initiatives is crucial. By creating an enabling ecosystem to boost women's participation in the workforce, India can establish a positive relationship between gender equality and economic growth.
The International Monetary Fund (IMF) highlights that achieving gender parity in India, where women participate in the labour force at the same rate as men, could elevate the nation's GDP by a staggering 27%.
Unleashing the Economic Power of Women
Currently, Indian women's economic contribution, at 17% of GDP, falls far below the global average. By increasing women's participation to 50%, India could potentially raise its annual growth rate by 1.5 percentage points to reach 9%. This underscores the undeniable link between women's participation and economic growth.
However, India lacks a dedicated ministry to track women's labour force participation, indicating the need for a renewed approach to GDP calculation, particularly in the context of Indian digitization.
Some experts also point out that while all women work, not all are paid for it. Recognizing and quantifying the unpaid work that women perform, especially in the realm of household and caregiving duties, could be a quick win in bridging the gender gap in economic participation.
Lessons from South Asia
India can draw inspiration from its South Asian neighbours, particularly Bangladesh, where high female labor force participation is driven by the textile industry. Many experts believe that micro, small, and medium enterprises (MSMEs) hold the key to increasing women's workforce engagement in India.
With widespread internet access, India has the potential to empower countless women to become entrepreneurs, contributing to economic value creation and digital payments.
Bridging the Policy Gap
While the digital space has given rise to a new generation of entrepreneurs, India's policy framework often lags behind. It is critical to align policy initiatives with the evolving economic landscape. Moreover, addressing women's representation in senior managerial positions, which currently stands at a dismal 15%, and increasing the number of firms with women in managerial roles (currently only 9%) should be prioritised.
The burden of caregiving disproportionately falls on women in India, impacting their career progression. Experts argue that the conversation should shift from merely providing flexibility to focusing on both maternity and paternity leave, emphasising shared caregiving responsibilities between men and women.
A Call for Transparency and Change
One promising development on the policy front is the Securities and Exchange Board of India (SEBI) regulation requiring the top 1000 firms to disclose gender-disaggregated information on employment, turnover rates, return to work rates, maternity leave, paternity leave, and skill development.
If enterprises begin reporting gender data in annual reports and public listing analyst calls, it can drive meaningful change in workplace dynamics and gender parity.
For India to realise the potential of its She-economy, the focus must shift towards empowering women economically, enhancing their social status, and granting them the freedom to make choices. Achieving gender and pay parity in the workplace is a long-term commitment that will lead to a more prosperous and equitable future for India.
In conclusion, India's journey towards becoming a $5 trillion economy hinges on its ability to fully utilise its female workforce. By adopting a gender-inclusive approach, recognizing unpaid work, promoting entrepreneurship, bridging policy gaps, and fostering transparency, India can empower its women to lead the charge in powering the nation's economic growth. The She-economy is not just a dream but a strategic imperative for India's economic future.