India must prepare to significantly increase its ‘Female Labour Force Participation Rate’ (LFPR) to 70% by 2047 if it aims to become a $30 trillion economy by that year. This objective, highlighted in a recent report, necessitates a $14 trillion contribution from women, translating to an additional 400 million women participating in the workforce.
The report further indicates that elevating the female labour force participation rate to 50% could propel India’s growth rate to 9.9%, leading to a substantial rise in the nation’s GDP. However, achieving this goal represents a formidable challenge, requiring immediate and strategic interventions, as suggested by the data analysis.
“In 2023, the LFPR for women was 37%, far below the global average of 47% and starkly lower than the 77% for men. At the current trajectory, only 110 million women are expected to join the labour force by 2047; an additional 145 million women need to be brought into the labour force to achieve the goal,” states the ‘Labour Force Participation Distillation Report’, launched by the non-profit ‘The/Nudge Institute’ at the ‘Charcha 2024’ livelihoods summit in New Delhi.
While the report underscores that India’s economic prosperity is contingent upon female participation in the workforce, it also highlights the vulnerabilities women face. For instance, it notes that women were seven times more likely to lose their jobs and eleven times more likely to remain unemployed after losing their jobs.
It also reveals that women are predominantly employed in a limited number of low-productivity, gender-specific sectors. “In agriculture and manufacturing, they face limited advancement, while in construction, they make up just over 12% of the workforce, earning significantly less than men in unskilled roles,” the report notes.
The report also examines the complex interplay of gender, family dynamics, and income. It shows that married women are less likely to work as their husband’s income increases. Furthermore, in households where a mother-in-law is present but not employed, married women are 20% less likely to work in rural areas and 30% less likely in urban areas, compared to households without a mother-in-law. Conversely, if the mother-in-law is employed, daughters-in-law are 50% more likely to be employed in rural areas and 70% more likely in urban settings.
The analysis also reflects on the pandemic’s impact, highlighting the precarious nature of female employment. During the crisis, many rural women entered or re-entered the workforce due to loss of income or job loss by the primary family earner.
The pandemic-induced decline in rural household incomes forced women into distressed employment. As incomes dwindled during the COVID-19 pandemic, households across the country sought additional work to mitigate their hardships. While some men took on multiple jobs to support their families, the trend was predominantly driven by women joining or rejoining the workforce. This included women who had previously worked in casual labour now unavailable, as well as those who had never been part of the labour force.
“The female labour force participation rate increased, but it wasn’t accompanied by an increase in the availability of jobs for women, especially in rural areas,” the report observes. It appears that the majority of women who joined the workforce were self-employed, with most of them working as own-account workers or unpaid helpers. “They operate primarily in agriculture and trade (household enterprises, street vending, etc.)—two sectors that are known for being fallbacks in times of economic distress due to their low barrier of entry. This type of employment is not aspirational in its current state as incomes are low and underemployment is high,” the report states.
Under normal circumstances, women who engage in distress employment are likely to exit the workforce once household incomes stabilise. However, that seems improbable today. This implies that these women are likely to remain in the workforce long-term and will require support to enhance their earnings.
Looking ahead, Kanishka Chatterjee, Director of ‘The/Nudge Prize’, emphasises that India’s demographic dividend cannot be realised without increasing women’s participation in the workforce. He advocates for addressing “the multifaceted barriers—economic, social, and cultural, which requires both urgent action and the patience to achieve large-scale disruption.”
The report outlines three pathways to enhance female labour force participation: “First would be to activate fractural employment – redefining work for women through platform jobs and digital microwork. The second would be invigorating entrepreneurship avenues through digital commerce infrastructure. Lastly, would be targeting bottlenecks like mobility and digital access that could inhibit the supply of women to labour markets,” it states.
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