Women make up half of India. Why are they still marginalised in the economy?

The gender gap in India's Economic growth

India, often celebrated as the world's sixth-largest economy, has a female population of 715.5 million. Women account for 48.46% of the country's population, making up nearly half the population. There are 943 women for every 1,000 men. But are women keeping pace with men in economic development?

Since the introduction of economic reforms in the 1990s, India's growth story has been the subject of heated debates over high GDP growth rates, declining extreme poverty and the universalisation of education, among other issues. Yet women's participation in the economy, measured by the Female Labour Force Participation Rate (FLFPR), has consistently remained on the sidelines of these discussions.

According to the International Labour Organization (ILO), women currently account for around 35% of India's labour force, significantly below the global average of 59%. Even countries with broadly comparable economic structures, such as Vietnam, Indonesia, the Philippines and Bangladesh, report female labour force participation rates ranging from 42% to 68%.

Gender equality is as essential to the economy as it is to every other sphere of society. India's gender parity in the economy currently stands at 36.7%. If this picture were to change and gender inequality were reduced, India's GDP could increase by as much as 30%. In monetary terms, this would translate into an additional $700 billion. Globally, countries with gender parity below 40% find themselves near the bottom of the rankings.

Why women remain on the margins of the economy

Social restrictions, limited access to education and a lack of skills are frequently cited as reasons for women's marginalisation in the economy. In India's case, however, the problem is considerably more complex.

One of the largest areas of women's economic contribution in India is unpaid domestic work, for which they receive no wages.

India's economic transformation has never quite followed conventional economic models. Typically, as a country progresses economically, workers gradually move from agriculture to factories and construction, and eventually into the services sector. Although India has undergone a similar transition, its pace and character have differed significantly from the patterns described in conventional development economics.

This distinction matters because gender equality is not merely a social issue. It is also an economic indicator that reflects the extent to which a society creates equal opportunities for its people. Where such opportunities exist, they can contribute substantially to national prosperity.

The unequal transition from agriculture to other sectors

A recently published research paper titled Structural Transformation in Agricultural Employment: Gender Disparities sheds light on this problem.

The findings show that women have lagged significantly behind men in moving out of agriculture.

In 1991, agriculture employed 63.4% of India's workforce and contributed 27.7% to GDP. By 2022, agriculture's share of the workforce had fallen to 42.9%, while its contribution to GDP had declined to 16.6%.

However, the gender-wise figures reveal a striking disparity.

In 1991, 58.66% of men were employed in agriculture. By 2022, this figure had fallen to 37.11%. Among women, the proportion declined from 77.75% to just 59.24%.

In other words, men have moved out of agriculture at approximately twice the rate of women.

This difference is significant because conventional economic thinking often assumes that economic growth automatically moves workers towards more productive sectors. India's experience suggests that this transition is neither automatic nor equally accessible to men and women.

The gender imbalance becomes even clearer when we examine the relationship between per capita GDP and agricultural employment. A 1% increase in per capita GDP is associated with a 0.93% decline in men's participation in agriculture, compared with a decline of just 0.58% among women.

Economic growth, therefore, does not necessarily translate into equal opportunities for women to move into other sectors.

The U-shaped trajectory of women’s employment

Women's labour force participation in India has followed a broadly U-shaped trajectory over an extended period, shaped by both the demand for and the supply of labour.

During the 1980s and the first half of the 1990s, women's participation in employment was relatively high.

Economists have shown that women's employment in agriculture increased between 1993–94 and 2004–05, partly due to the success of government rural development programmes.

The number of women employed in agriculture stood at 94.8 million in 1993–94. It rose to 96 million in 1999–2000 and reached 112.5 million in 2004–05.

From 2011–12 onwards, however, women's participation in agriculture began to decline significantly. Their numbers fell to 81.9 million in 2011–12 and further to 60.6 million in 2017–18.

The trend subsequently reversed.

From 2019–20 onwards, women's participation in agriculture began rising again. The number increased to 86.4 million, reached 100.7 million in 2021–22 and climbed to 136.5 million in 2023–24.

What explains this U-shaped trajectory?

Several factors have contributed to this pattern.

After 2000, agricultural mechanisation reduced the demand for manual labour. At the same time, the gradual diversification of the rural economy towards non-agricultural activities led many women to leave farming.

This period also witnessed significant progress in women's education. Every year, approximately 45 million female students pursue secondary and higher secondary education combined.

From 2004–05 onwards, India's GDP growth accelerated considerably. Its effects extended to the rural economy, where per capita GDP growth reportedly outpaced that of the urban economy by one percentage point. As rural household incomes increased, families became less dependent on women's agricultural labour.

This raises another question: how can the renewed increase in women's agricultural employment between 2018 and 2024 be explained?

The principal factor was the economic crisis triggered by the COVID-19 pandemic. As livelihoods collapsed, numerous families returned to their villages, where agriculture often remained the only available source of work. Women were compelled to enter or re-enter agricultural employment out of economic necessity.

Rising agricultural employment: A sign of distress?

The substantial increase in women's participation in agriculture after 2018 should not automatically be interpreted as evidence of a healthy economy.

The study identifies three distinct categories of women's agricultural employment.

The first is unpaid family labour (UFL). The number of women engaged in this category stood at 28 million in 2017 and rose dramatically to 58 million in 2023–24.

The second is own-account work, which largely represents another form of self-employment and includes marginal and small-scale women farmers. Their numbers increased from just 9.2 million in 2017–18 to 47 million in 2023–24—an increase of approximately 36 million in just seven years.

These figures demonstrate how indispensable women's labour has become to the survival of rural households.

The third category comprises female agricultural wage labourers. Their numbers increased from 19.6 million in 2017–18 to 24.2 million in 2023–24.

However, the number of women earning a regular income from agricultural work remains comparatively small. During the same period, their numbers rose from 7 million to 9 million.

This forced participation in agriculture has another important dimension. In rural India, non-agricultural sectors, particularly construction and rural manufacturing, often offer insecure employment and low wages.

Women may therefore remain trapped in agriculture not because it offers better opportunities, but because viable alternatives are unavailable.

The service sector offers a glimmer of hope

The urban employment landscape presents a somewhat different picture. The services sector has emerged as a comparatively promising avenue for women's employment.

The number of women employed in services increased from 15.1 million in 1999–2000 to 19.1 million in 2004–05. It reached 29.7 million in 2018–19 and rose further to 42.8 million in 2023–24.

Women have traditionally been concentrated in retail, education, public administration and domestic services. Over time, their participation has also expanded into healthcare, finance and insurance, food and beverages, computing and, of course, information technology.

There is encouraging news on another front. Women's employment in regular salaried, non-agricultural jobs had remained virtually stagnant from 2017 onwards. This trend has now begun to change.

The number of women employed in such jobs increased from 28 million in 2023 to 37.5 million in 2025.

Among young women aged 15–29, non-agricultural employment also increased, rising from 14.9 million in 2019–20 to 21.7 million in 2025.

Manufacturing has also witnessed growth, although at a comparatively slower pace. The number of women employed in the sector stood at 16.8 million in 2004–05, declined to 14.7 million in 2018–19 and subsequently increased to 24.5 million in 2023–24.

While these figures indicate some progress, the larger challenge remains: creating sufficient numbers of secure, well-paid jobs that enable women to participate in economic growth on equal terms with men.

Regional disparities and the burden of patriarchy

Women's employment in India is also characterised by significant regional disparities.

The study finds that female labour force participation is lower in northern India than in the southern and western regions of the country.

Several factors contribute to this divide. Social conservatism and entrenched patriarchal structures remain significant barriers in northern India. The region also lags behind the south and west in education and skills development.

Although educational opportunities have expanded across the country, school dropout rates after the secondary stage remain higher in northern India.

According to the National Family Health Survey, women in northern states tend to marry earlier and have more children. These factors can accelerate their withdrawal from the workforce.

State policies and administrative capacity also matter. Northern states have generally lagged in areas such as education and women's welfare, where effective public intervention can make a substantial difference to women's economic participation.

Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Goa are among the states that have performed relatively well in enabling women to enter the workforce.

The nature of women's employment also differs across regions. In northern India, women's participation is more concentrated in agriculture, dairy farming and related activities. In western and southern India, women have a greater presence in modern services.

The regional divide thus reflects not merely differences in employment rates, but also unequal access to the kinds of work that offer stability, mobility and economic independence.

The NEET crisis: An educated workforce without opportunities

Another term has increasingly entered contemporary economic debates: NEET, referring to young people aged 15–29 who are not in education, employment or training.

According to NITI Aayog figures cited in the discussion, India currently has approximately 87 million young people in this category. A substantial proportion are women.

Educational opportunities and access to skills development have expanded considerably for women. Their continued overrepresentation among NEET youth therefore points to a serious structural problem: a large pool of educated and potentially productive workers remains unable to translate its skills into employment.

The issue is not simply whether women are educated or willing to work. It is also whether the economy can create suitable opportunities for them.

A related challenge is underemployment, in which people are compelled to accept work below their qualifications or work that does not adequately utilise their skills.

Since the economy has failed to generate sufficient numbers of quality jobs, many women are forced into poorly paid, informal and irregular employment.

Between 2017–18 and 2023–24, the proportion of underemployed women in agriculture reportedly increased from 82.6% to 93.1%. In manufacturing, it rose from 74.7% to 81.8%. The services sector performed relatively better, although underemployment there also increased from 29.3% to 34.4%.

These figures point to a fundamental contradiction. Women may be entering the workforce in increasing numbers, yet their employment often fails to provide adequate earnings, security or opportunities for advancement.

Unpaid domestic work: The invisible economy

Women's economic contribution cannot be understood through employment statistics alone.

Domestic work remains one of the most significant yet undervalued components of India's economy.

According to estimates by the Organisation for Economic Co-operation and Development (OECD), women in India spend an average of 351.9 minutes every day on unpaid work, compared with just 51.8 minutes for men.

This includes cooking, cleaning, fetching water and caring for children and older people.

Such work is indispensable to the functioning of households and the wider economy. Yet because it does not generate a wage, it remains largely invisible in conventional economic calculations.

The resulting inequality has consequences far beyond the household. The time women spend on unpaid domestic responsibilities limits their ability to pursue education, acquire skills, seek paid employment and build independent careers.

The unequal distribution of domestic work is therefore not merely a private or family matter. It is a structural barrier to women's economic participation.

This, too, must change.

What must India do to achieve Gender equality?

If India is to become a developed country by 2047, it must make a concerted effort to reduce gender inequality. At the heart of this effort lies the economy, and the state must assume a central responsibility.

Approximately 82% of Indian women are primarily responsible for cooking, fetching water, cleaning and caring for children and older people.

One important intervention would be to extend the operating hours of Anganwadi centres in rural and urban areas from the existing three to four hours to six or seven hours. This would require the appointment of permanent staff and adequate investment in infrastructure.

Such centres could help reduce the burden of childcare on women and enable more of them to pursue paid employment.

Other essential measures include:

• Affordable public transport: Government-funded free bus services for women would help make commuting to workplaces more accessible.

• Publicly supported care facilities: Investment in crèches for children and care facilities for older people would reduce the disproportionate burden of unpaid care on women.

• Safer workplaces and public spaces: Greater public investment in women's safety is essential to enabling them to participate in employment without fear or insecurity.

• Better access to employment information: Women must have reliable access to job listings, recruitment networks and information about available opportunities.

• Support for women entrepreneurs: Policies must encourage women to establish and expand businesses, rather than limiting their participation to low-paid or informal employment.

The need to promote women's entrepreneurship is particularly pressing. According to the study, women own only 14% of India's micro, small, medium and large enterprises.

Government support is essential to changing this situation. The MUDRA loan scheme, in particular, needs to be evaluated to determine why it has not proved sufficiently effective in enabling more women to become entrepreneurs.

Financial assistance alone will not be enough. Women also need access to markets, training, business networks and institutional support to build sustainable enterprises.

The other half of the sky must have a place in the economy

India's ambition to become a developed nation by 2047 cannot be realised while a substantial proportion of its population remains excluded from the benefits of economic growth.

The figures reveal a persistent contradiction. Women constitute nearly half the country's population, contribute enormously to household survival and agricultural production, and increasingly enter education and employment. Yet they continue to face unequal access to secure jobs, regular incomes and economic independence.

The growing number of women in agriculture does not necessarily indicate progress when much of that employment is unpaid or undertaken out of necessity. Similarly, rising labour force participation means little if women remain trapped in underemployment, insecure work and an unequal burden of domestic responsibilities.

The challenge, therefore, is not simply to bring more women into the workforce. It is to create an economy in which women can access productive, adequately paid and secure employment without being held back by structural inequalities.

The state must invest in public infrastructure, childcare, social protection, skills development and women's entrepreneurship. Equally important is the need to redistribute unpaid domestic work and recognise its enormous contribution to economic life.

Unless the other half of the sky can establish its rightful place in the economy, India's dream of becoming a developed nation will remain unfulfilled.

Time is running out.