Leveraging Female Labour Force in India

Why in News?

In this article the author has highlighted that the looming U.S. tariff shock is a critical wake-up call for India to address its internal economic vulnerabilities, particularly the underutilization of its female workforce. Empowering women is presented as a strategic necessity for India to achieve sustainable and inclusive growth.

UPSC Relevance 

GS3, Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Inclusive Growth and issues arising from it.

PYQ

2023 – Distinguish between ‘care economy’ and ‘monetized economy’. How can the care economy be brought into a monetized economy through women empowerment? 

India’s Economic Prospects

• India’s economy has reached a valuation of $4.19 trillion, positioning it as a key player in the global growth scenario and on track to become the world’s third-largest economy. 
• However, this progress is facing a significant threat from a proposed 50% tariff by the United States on $40 billion worth of Indian exports. This could have a substantial impact, potentially reducing India’s GDP by nearly 1%.
• While China has been able to absorb U.S. tariffs due to its scale and diversified exports, India is more vulnerable. The U.S. accounts for 18% of India’s exports, and increased tariffs could result in a 30-35% cost disadvantage for Indian goods against competitors like Vietnam.

Challenges Ahead and the Women Link – highlighted by author

• Vulnerable Sectors: The tariffs would primarily target labor-intensive industries such as textiles, gems, and leather and footwear, which majorly employ women. These sectors, which employ nearly 50 million people, could see a projected export decline of up to 50%.
• A Strategic Liability: The article argues that India’s failure to economically empower its female population is not just a social issue but a strategic liability. The low female labor force participation rate (FLFPR), which has hovered between 37% and 41.7%, is far below the global average and China’s 60%. The International Monetary Fund suggests that closing this gender gap could boost India’s GDP by 27%.
• Rural vs. Urban FLFPR: While labor participation by rural women has slightly increased, it is mostly in low-productivity, unpaid family work.
  • In urban areas, female workforce participation has stagnated due to issues such as safety concerns, poor public transport, and the burden of unpaid care work.
• The Ticking Clock: Demographic Dividend and Stagnation
• India is nearing the peak of its demographic dividend [a critical period where the working-age population is at its highest relative to dependents].
• This window is projected to close by 2045. The article emphasizes that to sustain prosperity, India must fully integrate women into the workforce, especially as other major economies that once benefited from this dividend are now past their prime.
• Lessons from Southern Europe: India risks following the path of economies like Italy and Greece, where low FLFPR has created a long-term drag on growth. The article stresses that this is a “now-or-never” moment for India to capitalize on its demographic advantage.

Present Female Labour Force Participation Rate in India

• Based on the PLFS annual report for July 2023 – June 2024, the FLFPR for women aged 15 years and above in India was 41.7%. This represents a notable jump from 37.0% in the previous year (July 2022 – June 2023) and a substantial increase from 23.3% in 2017-18.

• This positive trend is largely driven by a significant rise in rural areas, where the FLFPR has nearly doubled in the last seven years. 
• While urban areas have also seen an increase, the growth has been more modest.
• The data indicates a positive shift, with more women entering the workforce, a trend that is considered crucial for India’s economic growth and for maximizing its demographic dividend.
• Reports indicate that the employability of female graduates has also increased from 42% in 2013 to 47.53% in 2024. 
• The employment rate (WPR) among women with postgraduate education and above has risen from 34.5% in 2017-18 to 40% in 2023-24.
• Additionally, EPFO payroll data further highlights the increasing participation of women in the formal sector. Over the past seven years, 1.56 crore women have joined the formal workforce. 
• Meanwhile, e-Shram as of August has recorded over 16.69 crore women unorganized workers’ registration, providing them access to various social welfare schemes of the Government of India.
• However, FLFPR is still low as compared to other key economies.

Factors Responsible for Low FLFPR

Socio-cultural Factors

• Patriarchal Norms and Gender Roles: Deep-rooted societal expectations and traditional gender roles often confine women to domestic duties and caregiving. The perception of the male as the primary breadwinner, even in low-income households where women’s income is crucial, adversely affects women’s education and training.
• Unpaid Domestic and Care Work: Women bear a disproportionate burden of unpaid work, including childcare, eldercare, and household chores. This leaves them with little time for paid employment, skill development, or education. A study found that married women in India spend over 7 hours per day on unpaid work, compared to less than 3 hours for men.
• Safety Concerns: Concerns about safety, including sexual harassment at the workplace and during commuting, act as a significant deterrent for women seeking employment, especially in urban areas or jobs that require long travel or late hours.
• Marriage and Motherhood: Marriage and the presence of children, particularly those under 14, significantly reduce a woman’s participation in the workforce. This effect is more pronounced in urban areas, where formal employment often requires structured hours and commuting, making it difficult to balance family responsibilities.

Economic Factors

• Mismatch of Labor Demand and Supply: While more women are becoming educated, there is a lack of suitable job opportunities, particularly for those with mid-level education (secondary school). The decline of traditional rural industries and the mechanization of agriculture have reduced employment for women, who are overrepresented in the agricultural sector.
• Structural Shifts in the Economy: The shift of the Indian economy from the primary (agriculture) to the tertiary (services) sector has not created enough jobs for women. The lack of well-paid, white-collar jobs, combined with the low job security and long hours in many available positions, narrows down the options for educated women.
• Increased Household Income: The “income effect” suggests that as household incomes rise, some women may choose to withdraw from the labor force. This is often linked to the perception that domestic non-market work holds a higher social status than paid market work.
• Informal and Low-Quality Employment: A large proportion of women are employed in the informal sector, where they are often subject to exploitation, low wages, and a lack of social security benefits. Despite laws like the Equal Remuneration Act, a significant gender wage gap persists, with women earning a smaller percentage of what men earn for the same work.

Legal Factors 

• Poor implementation of POSH Act 2013 : Many organizations, particularly small and medium-sized enterprises (SMEs) and those in the informal sector, either don’t have an ICC or their committees are not properly constituted or trained. Lack of awareness, coupled with the fear of social stigma, victim-blaming, and retaliation, leads to significant underreporting of cases.
• Discriminatory Labor Laws: Outdated labor laws have historically placed restrictions on women’s employment, such as prohibiting them from working at night or in certain “hazardous” industries . Many states have such restrictions like Assam, Haryana, Maharashtra etc.

Post-COVID-19 Impact

• The COVID-19 pandemic further exacerbated the challenges. While job losses were a global phenomenon, the burden of increased unpaid care work due to school and business closures fell disproportionately on women. 
• However, some studies also noted an “added-worker effect,” where women entered the labor force as a survival strategy to supplement family income after other household members lost their jobs.

Way Ahead – Solutions from Abroad and Examples at Home

The article highlights strategies from other countries to increase female labor force participation and offers examples of successful initiatives within India.

• Global Roadmaps:
  • U.S. (WWII Era): Leveraged women’s labor with equal pay and childcare.
  • China (Post-1978): Drove FLFPR to 60% through state-backed care and education.
  • Japan: Raised FLFPR from 63% to 70%, boosting GDP per capita by 4%.
  • Netherlands: Implemented a successful part-time work model with equal benefits, which could be suitable for India.
• Targeted Reforms in India:
  • Karnataka’s Shakti Scheme: The free public bus travel for women, launched in 2023, has led to a 40% surge in female ridership, enhancing mobility for work and education.
  • Gig Economy and Social Protections: Platforms like Urban Company have onboarded over 15,000 women service providers who earn ₹18,000-25,000 per month with benefits like accident insurance and maternity leave. This shows how formalizing gig work can empower semi-skilled urban women.
  • Rajasthan’s Indira Gandhi Urban Employment Guarantee Scheme: This program has created over 40 million person-days of work, with nearly 65% of jobs going to women, particularly in flexible, neighborhood-based roles.

Other Measures 

Legislative and Policy Interventions

• Enhancing the Care Ecosystem: The burden of unpaid domestic and care work is a significant barrier. Expanding and subsidizing childcare and crèche facilities is critical.
  • Example: The Maternity Benefit (Amendment) Act, 2017, mandated crèche facilities in establishments with 50 or more employees. However, the threshold is often too high, leaving many women in smaller workplaces or the informal sector without support. The government can lower this threshold and provide incentives for companies to comply.
• Promoting Flexible and Safe Work Environments: Creating a work culture that accommodates women’s needs is essential for both retention and recruitment.
• Example: The promotion of flexible work arrangements like work-from-home or hybrid models, especially in the IT and service sectors, can help women balance professional and personal responsibilities. 
• The government can also strengthen the enforcement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act), by improving the training and functioning of Internal Complaints Committees (ICCs) and Local Committees (LCs).
• The labour laws may be amended to allow women to work till late hours with adequate safety measures in place.

Economic and Skill Development Strategies

• Investing in Women’s Education and Skilling: While education levels have risen, a mismatch exists between women’s qualifications and available jobs. Focusing on vocational training and skill development in high-growth sectors can bridge this gap.
  • Example: Schemes like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) can be specifically tailored to train women in new, non-traditional sectors like digital services, drone technology, and sustainable agriculture. The ‘Namo Drone Didi’ initiative is a recent example of skilling women in emerging fields.
• Encouraging Female Entrepreneurship: Providing financial support and mentorship can empower women to become self-employed and create their own jobs.
  • Example: The MUDRA Yojana and Stand-Up India scheme offer collateral-free loans to women entrepreneurs. Increasing awareness and simplifying the application process for these schemes would significantly benefit women, particularly in rural and semi-urban areas.

Social and Cultural Reforms

• Challenging Gender Stereotypes: Tackling deep-rooted social norms is a long-term but vital strategy. Public awareness campaigns and educational reforms can help change perceptions about women’s roles.
  • Example:In April 2025, the MenEngage Alliance in India launched a powerful campaign focused on engaging men and boys in advancing gender justice..
• Improving Public Safety and Infrastructure: The fear of harassment and assault, especially during commuting, is a significant deterrent.
  • Example: Improving public transportation with dedicated security personnel and better lighting, as well as creating safer public spaces, will increase women’s mobility and confidence to seek employment outside their homes.