Nithin Kamath discusses India’s low female work force participation rate

The labour force participation rate, often described as the percentage of individuals aged 15 and above who are actively engaged in economic activities, has been a topic of concern over the years. Particularly noteworthy is the declining trend in female labour force participation since 1990, a trend that stands in contrast to the global trajectory. In comparison to lower-middle-income countries, the gender gap in India's labour force participation is more pronounced, painting a picture of unequal opportunities.

Kamath emphasised the link between female workforce participation and per capita GDP, outlining a U-shaped connection. At lower income levels, a substantial portion of female employment is driven by necessity or distress. This phenomenon extends to children as well. As income levels rise, distress employment increases, leading to a decline in female labour force participation. However, as income levels continue to climb, women start to re-enter the labour force, this time out of choice rather than compulsion.

A telling statistic underscores the urgency of addressing this issue: Indian women contribute a mere 18 percent to the country's GDP despite constituting 48 percent of the population. The implications are crystal clear – by narrowing the gender gap in employment, India's GDP could experience a remarkable upswing of up to 30 percent.