India needs 400 million more women in workforce to contribute $14 trillion to economy: Report

New Delhi, August 24

India requires an additional 400 million women in the workforce to contribute $14 trillion to the economy which would necessitate nearly doubling the current female labour force participation rate (LFPR) from 37 per cent to 70 per cent by fiscal year 2047, according to a new report.

Non-profit The/Nudge Institute has unveiled a new report, Labour Force Participation Distillation Report, outlining a crucial element for India’s economic future. The report is based upon Periodic Labour Force Survey (PLFS) over the years.

As the country aims to become a $30 trillion economy by 2047, the report highlights the need for a substantial increase in female labour force participation to achieve this goal.

According to the report, India requires an additional 400 million women in the workforce to contribute $14 trillion to the economy. This would necessitate nearly doubling the current female labour force participation rate (LFPR) from 37 per cent to 70 per cent by fiscal year 2047.

With only 110 million women projected to join the labour force by then, an additional 145 million women need to be integrated to meet this target.

The report reveals a stark disparity in job security and recovery between men and women.

Women were found to be seven times more likely to lose their jobs and eleven times more likely not to recover from job loss. By 2020, nearly half of the women employed in 2019 had exited the workforce, the report said.

Women predominantly work in low-productivity sectors, such as agriculture and manufacturing, where they face limited advancement.

According to the report, in construction, women represent just over 12 per cent of the workforce, often earning significantly less than men in unskilled roles. The pandemic has exacerbated these issues, with many rural women forced back into work due to income loss or job loss by primary earners, underscoring the fragility of female employment.

To address these challenges, the report outlines three key pathways to increase female labour force participation.

First, redefining work through platform jobs and digital microwork could activate fractural employment.

Second, enhancing entrepreneurship opportunities via digital commerce infrastructure could invigorate the sector.

Third, addressing bottlenecks, such as mobility and digital access, is crucial to improving women’s participation in the labour market.

Kanishka Chatterjee, director and head of The/Nudge Prize, emphasised the urgency of this challenge.

“India’s demographic dividend and dreams of a $30 trillion economy cannot be realised without boosting the participation of women in the workforce,” Chatterjee said.

He acknowledged the strides made but stressed the need for urgent and sustained action to overcome economic, social, and cultural barriers.

To build this report, The/Nudge Prize team looked at all of the PLFS data across the last two cycles of different sectors that are contributing to it or that are seeing higher growth rate, the report said.

“When we looked at PLFS data, we understood what the supply side is or where women or men work today. But there are no other data pointers available where we can clearly see what are the demand markers available in India which will hire women, or which may be better suited for women to take jobs or to drive their entrepreneurial journeys,” it said.

“One of the key things to consider, if we need to solve or address labour force participation rate, is two have a holistic approach. Not only to see how labour is available and what skills are available, but also to see what is driving demand today — and this is exactly what we also bring out in the report,” the report added.