Caregivers to contributors: Can India unlock the full potential of its female workforce?

India’s economic future hinges on a crucial yet underutilized resource: its women. From driving households to supporting communities, women are integral to all sectors. As India strives to achieve its vision of becoming a developed nation by 2047, a key objective the government has stated is to ensure that 70% of its women are actively engaged in economic activities.

However, achieving this ambitious goal will require dismantling deeply rooted socio-economic barriers that prevent women from entering or staying in the workforce. Better access to childcare, elderly care, and workplace flexibility could help transform India's labour market and unlock new drivers of economic growth and social equality.

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Reality or mirage?

Around 41.7% of India’s women were in the labour force (i.e., employed or unemployed but looking for work) in the 12 months ended June 2024, according to the government’s Periodic Labour Force Survey (PLFS). This figure, called the female labour force participation rate (FLFPR), has grown by 18 percentage points from six years ago when the data left policymakers and economists alarmed.

However, the International Labour Organization’s (ILO) “modelled” estimates showed India’s internationally comparable FLFPR at 32.8% in 2023. (The difference is due to the ILO's adjustments made for better comparability across countries.) Whichever figure you take, India’s FLFPR remains dismal at the global level: By ILO’s metric, it’s the lowest among G20 nations.

Experts feel that though the growth in FLFPR is welcomed, the debate now centres on what this growth truly signifies. "While it's encouraging to see an increase, we must ask whether it’s driven by necessity—women entering the workforce as supplementary earners due to household financial strain—or by opportunity, seeking employment because the economy is offering more prospects," said Amit Basole, a professor of economics at Azim Premji University.

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Further, even as overall economic growth and corporate profits have recovered after the pandemic, labour demand has remained weak for both men and women. While wage growth has stagnated in the formal sector, the informal sector has ballooned as more people return to agriculture. Basole noted that this general softness has affected everyone, but women are disproportionately impacted. "Women, who are often the 'last hired, first fired', face an even steeper challenge, as the weak labour market tends to hit them harder than men," he added.

The PLFS data shows 67.4% of the employed women were self-employed in 2023-24, up from 51.9% in 2017-18. These jobs may offer meagre-to-no wages. Average earnings for women have been stagnant, and the gender pay gap is significant across job categories. For instance, in salaried jobs, which is the best earnings category, women earn about ₹74-76 per ₹100 earned by men, official data shows. The gap is the highest for self-employment, where women earn about ₹35-38 for every ₹100 earned by a man.

To become a $30 trillion economy by 2047, India’s FLFPR must scale up to 70%. This roughly requires 400 million women in the workforce. But at the current pace, India will add only 110 million women workers by then, which will fall 145 million short, an October 2024 report by Bain & Co. and Magic Bus India Foundation showed.

The invisible burden

One big obstacle to women’s full participation in the workforce is the disproportionate share of unpaid care and domestic work they shoulder. Given the high degree of informality, data can fail to capture these nuances when defining ‘work’. On average, women in India spend 7.8 times as much time per day as men do on household and caregiving tasks, roughly unchanged since 2019, according to the latest Time Use Survey. The gendered division of labour at home not only limits women’s earning potential but also hinders their ability to access opportunities in the formal economy.

The government’s focus on funding schemes that can positively impact women, as seen in its gender budget, has grown sharply. The 2025-26 gender budget stands at ₹4.5 trillion, amounting to 8.9% of its total planned expenditure, the highest ever share. But a finer reading shows that a large part of the allocation is for schemes that aren’t fully centred on women, that is, where women could have been natural beneficiaries (such as free food scheme, upgradation of educational institutions and health infrastructure). A more targeted approach towards spending on women is limited to schemes such as rural and urban housing schemes or those targeted at improving nutrition outcomes.

Experts feel public-private partnerships can be crucial to expand childcare and elderly care services to introduce quality assurance mechanisms. “The care economy presents immense potential for job creation, not only for care workers but also for domestic workers, whose social protection is crucial,” said Mitali Nikore, founder and chief economist of Nikore Associates.

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While education is important, it alone may not guarantee increased participation in the workforce. Socio-cultural transformation, institutional interventions, and strong societal and familial support are equally crucial. Factors such as work conditions, safety, mobility, and workplace norms all play a significant role in improving the quality of women’s employment.