Context

• India aims to become a Viksit Bharat by 2047, but achieving this goal requires sustained 8–9% GDP growth, productive employment, and inclusive development.
• Rising youth unemployment, slowing structural transformation, increasing income inequality, and low Female Work Participation Rate (WPR) have weakened the economy.
• While external shocks such as the West Asia conflict have exposed these vulnerabilities, domestic policy shocks since 2016 have already slowed job creation and reduced private investment.
• Unlocking women’s employment is essential for restoring growth.

India’s Employment Challenge

• India’s recent growth has been largely jobless, with employment failing to keep pace with the expanding workforce.
• Economic disruptions caused by demonetisation, a poorly implemented GST, the NBFC crisis, and the COVID-19 pandemic reversed structural transformation by increasing dependence on agriculture and reducing manufacturing employment.
• The resulting rise in inequality weakened aggregate demand, lowered private investment, and slowed non-farm job creation, limiting India’s long-term growth potential.

Women’s Employment: A Powerful Growth Multiplier

• Expanding women’s participation in the workforce is one of the strongest drivers of economic growth.
• A 10-percentage-point increase in female WPR could raise GDP growth by nearly 2 percentage points.
• Greater female employment:
  • Expands the labour supply and productive capacity.
  • Raises household incomes, consumption, and savings.
  • Improves nutrition, education, and healthcare, strengthening human capital.
  • Promotes productivity, innovation, and competitiveness through gender-diverse workplaces.
• Women’s employment is therefore both an economic necessity and a tool for inclusive development.

Why India’s Female Work Participation Remains Low?

• India’s female WPR remains below 30%, among the lowest globally.
• During the 1980s and early 1990s, women’s participation was high because of agricultural employment.
• However, mechanisation, declining demand for manual labour, and rising education reduced female participation between 2004 and 2018, reflecting the first phase of the U-shaped labour participation hypothesis.

The Illusion of Rising Female Employment after COVID-19

• The rise in female WPR after 2020 largely reflected economic distress rather than quality employment.
• Pandemic-induced reverse migration and shrinking urban jobs forced many women into Unpaid Family Labour (UFL), subsistence farming, animal husbandry, and poultry.
• This distress-driven feminisation of agriculture increased labour participation but not productive or secure employment.

Manufacturing: The Missing Link

• India’s growth has been concentrated in capital-intensive sectors such as finance, IT, and organised manufacturing, which generate limited employment.
• Labour-intensive industries like textiles, garments, footwear, food processing, and MSMEs experienced declining employment between 2013 and 2019.
• Despite Make in India and the Production-Linked Incentive (PLI) scheme, women’s manufacturing employment in 2019 remained below its 2004 level, recovering only by 2022. Expanding labour-intensive manufacturing is therefore critical for employment generation.

Regional Divide: Lessons from Tamil Nadu

• A sharp North-South divide characterises female employment.
• Tamil Nadu, with only 5–6% of India’s population, employs over 40% of the country’s women factory workers due to its strong textile, electronics, footwear, and automobile industries, combined with better female literacy, transport, hostels, and social acceptance of women workers.
• In contrast, many northern states suffer from weak public education, poor healthcare, high malnutrition, low female mobility, and limited industrialisation.
• Bihar, for instance, has a female WPR of only 15%.

The Crisis of Educated Young Women

• Although secondary education has achieved near gender parity, employment opportunities have not kept pace.
• The number of women aged 15–29 years who are NEET (Not in Employment, Education or Training) has risen from below 70 million before 2004 to over 100 million by 2018.
• Rising unemployment among educated women represents a major loss of India’s demographic dividend.

Way Forward

• India should promote labour- intensive manufacturing, strengthen MSMEs, improve public education and healthcare, enhance women’s safety, transport, childcare, and hostel facilities, expand skill development, and encourage women’s entrepreneurship.
• Replicating the Tamil Nadu model in northern states through industrial clusters and gender-friendly infrastructure can substantially increase female employment and accelerate inclusive growth.

Conclusion

• India cannot achieve Viksit Bharat by excluding half of its population from productive employment.
• Higher female labour force participation, stronger manufacturing, investment in human capital, and greater gender equality are essential for generating employment, boosting productivity, and sustaining long-term economic growth.
• Women’s employment is not merely a social objective but the missing engine of India’s development.