By Amit Kapoor
India entered its demographic dividend in 2005-06 with an expected peak in 2040 creating high hopes and expectations of economic growth for the country. As much as the development of a nation depends on eclectic variables and conditions, women empowerment is an established essential element to propel this growth. The equal participation of women in the labour force can boost India’s gross domestic product (GDP) by 27%, according to International Monetary Fund calculations. As it catalyses various development goals including sustainable development goals, ensuring economic participation of women emerges as a priority for a developing nation like India.
For India, the economic participation of women has been witnessing a steady rise over the past few years. The female labour force participation rate (LFPR) was recorded at 41.7% in 2023-24 compared to 23.3% in 2017-18, according to the latest Periodic Labour Force Survey data. This growth, however impressive, remains well below the male LFPR of 77.2%. Moreover, it also lags behind the global female LFPR calculated by the World Bank at 50%. As India aims to achieve the vision of Viksit Bharat and elevate to a $7-trillion economy by 2030, a minimum of 50% women need to become an active part of the workforce, according to a report by The Nudge Institute.
Among the reasons for low participation of women in the economy, their engagement in domestic unpaid care activities emerges as the most prominent and alarming since it indicates an absence of sufficient economic activities in this area and undermining of the labour performed by women. The total value of unpaid care work performed by Indian women equals to a massive 15% of GDP, with India featuring among countries with the highest disparity between men and women engaged in unpaid care responsibilities. According to a recent report released by the International Labour Organization (ILO), nearly 53% women in India are out of the workforce due to care obligations while for men this number is as low as 1%. The report also cites family and care related responsibilities as the reason behind the exclusion of 97.8% women from the labour force. It is more concerning that even with higher levels of education, employed women spend six times more working hours on unpaid care activities than men, according to the ministry of women and child development. Further, women in urban areas have a nine times higher burden of unpaid care activities compared to men while rural women carry eight times the burden of men.
The World Bank describes the care economy as “essential in daily life and a driver of economic growth, human capital development, and employment”. Its essentiality for economic participation of women makes it an urgent case to evolve into an ecosystem of paid economic activities. UN Women opines that formalising the care economy would lead to a reduction in female poverty in multiple ways; for instance, extended social security cover, increase in availability of time and resources for skill development, etc.
As India descends from its demographic dividend, the elderly and children in need of care services will respectively constitute 20% and 18% of the total population, which is expected to grow substantially by 2050. ILO estimates that a public investment equating to 2% of GDP in India could lead to the creation of more than 10 million employment opportunities by 2030, with prominent access to women. While there are some robust legal mechanisms in place, such as the Maternity Benefit Act, to accommodate the care services for working women a more integrated approach towards redistribution of unpaid care work is yet to crystalise. The Supreme Court in February 2024 recognised the monetary contributions of unpaid care work by women as “deemed income”. In April 2024, the apex court reiterated the entitlement of women under Article 15 of the Constitution to participate in the workforce and a duty of the State to enable conditions for it. Some courts around the globe have gone a few steps ahead and awarded compensation to women for unpaid care work delivered over the years.
With the legal recognition of the economic value and significance of care services, the government must explore various models to implement the ecosystem approach to cater to economic and social requirements. Affordability, accessibility, and qualitative superiority are some the aspects which need to be enshrined in the institutions, both public and private, offering and enabling care services. Investments in rebuilding care ecosystems can provide opportunities for public and private sectors to develop strategies for women-led development. This also opens an ambit for proactive regulation to establish standards for various sectors of the care industry, and to ensure a seamless transition of unpaid work into a just and fairly monetised economic activity.
India can leverage its experience in social development and utilising public-private partnerships to attain social progress goals. Community-based models also have a high potential to sustain the need for infrastructure creation, skill development, and induction of the workforce. Providing care related services within the reach of women has already started with organisations like SEWA (Self-Employed Women’s Association) taking the lead in providing childcare services and enabling employment opportunities for more than two million women engaged mostly in informal economic activities.
The government has taken some steps to transform the care economy, most recently in the Budget 2025 by announcing a target to establish 200 daycare centres in hospitals with plans of gradual expansion over the next three years. The upcoming and urgent priority for policymakers in India should be to devise a strategy leveraging technology and infrastructure to create a cadre of skilled professionals with space for the private sector to participate, which could create long-term impact to attaining gender parity. The 3R approach of Recognition, Reduction, and Redistribution of unpaid care work can set the course correction of gender justice and women empowerment in India by giving Nari Shakti a meaningful nuance of freedom and opportunities.
The author is Chair at Institute for Competitiveness.
With inputs from Vidhi Tiwari, researcher, Institute for Competitiveness
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