(Commonwealth_ India) The World Bank’s recent South Asia Development Update highlights that India‘s manufacturing output could see a significant increase of 9% if more women enter the workforce. The report maintains India’s GDP growth projections at 7% for FY25 and 6.7% for FY26, underpinned by strong domestic demand and recoveries in neighboring economies such as Sri Lanka and Pakistan.
The report attributes the expected growth in South Asia, projected at 6.4% for 2024, to a combination of robust agricultural output and targeted policies aimed at enhancing employment rates. It notes that while private consumption is expected to thrive, public consumption will moderate due to planned fiscal consolidation measures. Research indicates a pronounced disparity in female labor force participation across South Asia, with married women in the region experiencing an average employment rate that is 12 percentage points lower than their unmarried counterparts. Countries studied include India, the Maldives, Nepal, and Bangladesh.
Martin Raiser, World Bank Vice-President for South Asia, emphasized the importance of key policy reforms to facilitate women’s integration into the workforce and to attract global investment. He stated, “Our research shows that aligning female labor force participation rates with those of men could lead to a regional GDP increase of up to 51%.” According to the latest Periodic Labour Force Survey, India’s female labor force participation rate rose to 41.7% in FY24, a significant increase from 23.3% in FY18. The World Bank report indicates that the manufacturing sector, followed by services, would experience the most substantial gains from closing the gender gap in labor participation across South Asia.
The current female labor force participation rate in South Asia is among the lowest globally, with only 32% of working-age women engaged in the labor force, compared to 77% of working-age men. Notably, this participation rate is 5 to 25 percentage points lower than in countries with similar development levels, except for Bhutan. The report identifies several barriers that limit women’s participation in the workforce, including inadequate transport options, lack of childcare facilities, and restrictions on mobility. These challenges often confine women to informal sector jobs with limited remuneration.
The analysis suggests that, fueled by strong domestic demand, India is positioned to exceed previous growth expectations. As global investors seek opportunities in regions characterized by low geopolitical risks and strong economic fundamentals, India stands out as a promising candidate.
Franziska Ohnsorge, World Bank Chief Economist for South Asia, stressed that increasing women’s employment requires collaborative efforts from various stakeholders. “A multi-pronged strategy involving governments, the private sector, communities, and households is essential for meaningful progress,” she concluded.
