Missing half in India's growth puzzle: Female labour participation just 42%

Over 125 million women in India with secondary or higher education are outside the labour force

India’s female labour force participation rate (FLFPR) is among the lowest in the Group of Twenty (G20), with a large share of working women employed in agriculture or in unpaid or low-productivity self-employment, according to a report by 

Axis Bank. 

Female labour force participation stands at about 42 per cent, placing India among the lowest in the G20 and the fourth lowest among major economies, the report said. 

The report — The Missing Half: Women and India’s Growth Challenge — observes that about 61 per cent of working women are in agriculture, a sector that contributes relatively little to the country’s gross domestic product (GDP). 

Neelkanth Mishra, chief economist at Axis Bank, said the country must address multiple barriers to bring more women into the workforce. “We must raise demand for labour, improve infrastructure, remove outdated legal barriers, and work on childcare facilities and workplace flexibility to get the ‘missing half’ into the workforce,” Mishra said. 

The report highlights the need for greater job creation, improved childcare systems, better safety and mobility, and policies supporting flexible or part-time work. It also stresses the importance of creating non-farm jobs closer to where women live and expanding vocational and skills training, noting that about three-fourths of Indian women have not received vocational or technical training. 

A large share of women’s work also remains invisible in official statistics because unpaid household and caregiving work is not counted in GDP or labour force participation. The report said that Indian women spend around 20 per cent of their day on unpaid household and care work, and every additional hour spent on such work reduces the likelihood of women being employed. 

Even among women who are employed, a majority work in low-productivity sectors. The report said 61 per cent of working women are engaged in agriculture — far higher than in other emerging markets and about 3x the share in China. Agriculture itself accounts for a relatively small share of India’s output, with about 45 per cent of the country’s workers producing roughly 15 per cent of GDP in the sector. 

Many women are also self-employed. Two-thirds of women workers are in low-productivity employment, and more than half of self-employed women perform unpaid work such as animal husbandry or assisting in family enterprises. Even among those who earn wages, around 60 per cent of work arrangements are informal, with no written job contracts or social security benefits. The report said this pattern is not necessarily a matter of choice but often reflects limited availability of non-farm jobs, compounded by mobility constraints. 

The burden of unpaid work is also considerably higher for women. According to Organisation for Economic Co-operation and Development estimates cited in the report, the female-to-male ratio of time spent on unpaid work in India is 6.8, compared with around 1.5 to 2.6 in most other countries. 

The study also pointed to gaps in education and employment outcomes.  According to the report, around 125 million women in India with secondary or higher education — including about 35 million graduates and postgraduates — are currently outside the labour force. 

The report also cited safety concerns as a barrier.  The study said the gap between male and female participation in the workforce stems from multiple structural factors, including weak demand for labour, the burden of unpaid care work, cultural norms, and the structure of the job market, where fewer jobs exist in sectors that typically employ women in other economies.

Urbanisation could help improve participation as cities offer jobs outside agriculture and higher wages. However, safety concerns and commuting challenges continue to affect women’s participation in urban areas. The report also noted that women remain under-represented in leadership positions. Only about 14 per cent of members of Parliament in the Lok Sabha are women, compared with an Asian average of 22 per cent and a global average of 27 per cent. “India’s growth ceiling is directly tied to its glass ceilings,” said Rajkamal Vempati, group executive and head of human resources at Axis Bank.