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Unleashing India's economy rests on including Women in its Workforce

In a few months, a baby will be born in India. On the surface, this is not that remarkable, indeed 86,000 babies are born every day in India. But this newborn will represent an incredible shift in global demographics as India will eclipse China as the world’s most populous country. According to the UN Population Fund, India’s growing population is to surpass 1.428bn by mid 2023, just above the more than 1.425bn people in China.

Population growth has obvious economic advantages and it is no small coincidence that India - home to the highest number of working-age people - has recently overtaken China as the fastest-growing major economy. It is hoped that this “demographic dividend” will fuel India’s growth for decades to come - but only if properly managed. Just one of many issues is addressing the issue of female labour participation.

India’s female employment rate is among the lowest for emerging economies, rated at just 25% in 2022. Even more concerning is that despite an improvement in economic conditions, the rate of female employment has actually declined by 10% since 2004.

There are various explanations as to why this is. The national employment crisis is one. Despite rapid growth, the economy is struggling to accommodate the sheer number of young people and the growing sectors of IT, telecoms and outsourcing are simply not manpower intensive. With 7% of the population unemployed, women are competing in a tight labour market.

Cultural beliefs which view women as primary caregivers compound this issue, with women who leave the home to enter the workforce often stigmatised by the community. "Family is the first priority for many women across the world, but especially in a country like India that's very traditional,” says A. L. Sharada, sociologist, demographer and director of Population Fund. “We still [have] a glorified image of women as mothers sacrificing, caring and nurturing. The other aspects of a woman – as a competitor or achiever with aspirations — are not given much importance." Meanwhile, a lack of access to family planning and traditional perspectives on female education have further stymied participation.

For those who do overcome these barriers, social norms act as a further constraint. In rural areas, the lack of public transport is limiting participation whilst in India’s busy urban centres there are safety concerns around travelling to work. Moreover the gender discrimination which women suffer in the workplace, in terms of wages and opportunities, creates further barriers.

If India is to seize the opportunity of its demographic dividend then women must be incorporated into the formal economy and enter the most productive industries. Boosting access to family planning services, fostering a shift in societal views, and ensuring the safety of women would facilitate a greater number of women joining the formal work environment and have enormous repercussions for the Indian economy. Industry professionals argue that closing this gap could unlock immense economic potential. According to a 2018 McKinsey report, a 10 percent increase in female workforce involvement could contribute an additional $552 billion to the country's GDP.

Everyone recognises the incredible potential of India this century, in geopolitics, finance, business and manufacturing. It is time India seized the potential contribution of their women in realising this potential.


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