India can add $700 bn to $1.4 trn to GDP with higher female workforce participation, says CSEP study
A study by the Centre for Social and Economic Progress (CSEP) estimates that raising female workforce participation in India could add between $700 billion and $1.4 trillion to GDP — the lower estimate assuming current productivity levels, the higher one assuming a shift of women into non-farm, higher-productivity jobs.
The study estimates India would need roughly 90 million additional women in the labour force to match the average female labour force participation rate of developed economies, around 54%.
India's female labour force participation rate has been volatile: about 37% in 2004-05, falling to 21% in 2017-18, before recovering to roughly 34-42% (depending on the survey round) by 2023-24.
The study finds that weak labour demand and a shortage of quality formal jobs, not social norms alone, are the binding constraint; recent gains have come mainly through self-employment and unpaid/subsistence work in rural areas rather than salaried formal employment, even as agricultural productivity and self-employed earnings declined.
Policy recommendations include flexible labour market reforms, expansion of labour-intensive manufacturing such as textiles, rationalised tariffs and stronger trade agreements, and increased public spending on health and education.
Labour Force Participation Rate (LFPR) — Definition and Measurement
The Labour Force Participation Rate is the percentage of the working-age population (15 years and above, per Indian convention) that is either employed or actively seeking employment. It is distinct from the Worker Population Ratio (WPR), which measures only the employed share of the population, and from the Unemployment Rate, which measures the jobless share within the labour force itself.
Key Details
- Measured in India through the Periodic Labour Force Survey (PLFS), conducted by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Programme Implementation (MoSPI), launched in 2017.
- Per PLFS Annual Report (July 2023-June 2024), female LFPR (age 15+) rose to 41.7%, up from 37.0% in 2022-23 and from a low of 23.3% in 2017-18; female Worker Population Ratio rose to 40.3% in 2023-24 from 22.0% in 2017-18.
- Rural female LFPR rose faster than urban — from 24.6% (2017-18) to 47.6% (2023-24) — a rise the CSEP study attributes substantially to distress-driven self-employment rather than quality job creation.
- India's female LFPR remains well below the global average (~47-50%) and far below the roughly 54% average of OECD/developed economies cited in the study.
The CSEP estimate of 90 million additional women needed in the workforce is calculated precisely against this developed-economy LFPR benchmark, making the LFPR/WPR distinction a testable Prelims concept underlying the headline GDP figure.
Female Workforce Participation and GDP — The "Demographic Dividend" Linkage
Economists link labour force participation to potential output through the standard growth-accounting framework, where GDP growth depends on labour input (workforce size and utilisation), capital, and productivity. Underutilised female labour is treated as "unrealised demographic dividend" — a workforce cost-effectively available without population growth.
Key Details
- Global comparative estimates (e.g., McKinsey Global Institute's earlier "Power of Parity" work) have similarly projected trillion-dollar-scale GDP gains from closing gender gaps in labour markets, a methodology the CSEP study extends to India-specific data.
- The study's productivity-adjusted range ($700 billion at current productivity vs. $1.4 trillion with a shift to higher-productivity, non-farm jobs) mirrors the standard distinction in labour economics between an "extensive margin" gain (more workers) and an "intensive/quality margin" gain (better jobs).
- India's declining public spending on health and education (cited in the study at around 1% of GDP against a recommended 3%) is linked in human-capital theory to constraints on female labour supply, since health and education investment raises both employability and job quality.
The study's headline dollar range operationalises the demographic-dividend argument, making explicit that the size of the GDP gain depends on whether new female workers enter low-productivity subsistence roles or higher-productivity formal employment.
Government Schemes and Policy Levers for Female Workforce Participation
India's principal instruments to raise female workforce participation span skilling, labour law reform, and sector-specific job creation, several of which map onto the CSEP study's own recommendations.
Key Details
- The four Labour Codes (Code on Wages 2019; Industrial Relations Code 2020; Code on Social Security 2020; Occupational Safety, Health and Working Conditions Code 2020) consolidate 29 central labour laws and include provisions enabling women's employment in night shifts (with consent and safeguards) and equal remuneration principles.
- Schemes aimed at supporting female labour supply include creche/childcare provisions under the Maternity Benefit (Amendment) Act, 2017 (extending paid maternity leave to 26 weeks) and skilling missions under the Ministry of Skill Development and Entrepreneurship.
- The textiles and apparel sector, flagged in the study as a labour-intensive manufacturing opportunity, is also targeted by the PM MITRA (Mega Integrated Textile Region and Apparel) parks scheme and the Production Linked Incentive (PLI) scheme for textiles.
The study's call for expanding labour-intensive manufacturing and trade agreements aligns directly with existing government schemes in textiles, positioning the CSEP findings as a data-backed case for accelerating already-announced policy tracks rather than proposing an entirely new framework.
- Estimated GDP gain from higher female workforce participation: $700 billion (current productivity) to $1.4 trillion (higher-productivity jobs)
- Additional women needed in workforce to match developed-economy participation (~54%): approximately 90 million
- India female LFPR: 23.3% (2017-18) → 37.0% (2022-23) → 41.7% (2023-24), per PLFS
- Female Worker Population Ratio: 22.0% (2017-18) → 40.3% (2023-24)
- Rural female LFPR: 24.6% (2017-18) → 47.6% (2023-24)
- Agricultural productivity cited as declining ~9%; self-employed earnings down ~32% in the period studied
- India's public health + education spending: ~1% of GDP vs. recommended 3%
- PLFS conducted by NSSO/MoSPI since 2017