Women's Participation in India's Labour Force Must Not Languish

The economy may stay in a low equilibrium if we do not act to resolve well-identified restraints on women taking up jobs

- Kritika Soni & Jayanta Talukder

As India inches closer to the $5 trillion economy mark, with human capital playing a key role, a critical disconnect emerges in this growth story: the disparate contribution of women to the labour force and the economic loss therein. According to the Periodic Labour Force Survey (PLFS) 2023-24, the literacy rate for urban women stood at 84.9%; yet their labour force participation rate (FLFPR) was only 28%. In contrast, the gap between literacy and work participation for rural women is smaller, at 22 percentage points (see data graph). While this imbalance is universal, even among developed economies like the U.S., Japan, Germany, and Australia, where female literacy rates are nearly 100%, there is an almost 40 percentage point gap between literacy and FLFPR (World Bank 2024). However, developing nations like Vietnam and Bangladesh show a smaller gap of 25 points. India lies in between, with a gap of nearly 33 points (rural-urban combined) but with a lower female literacy rate (74.6% according to PLFS 2023-24). This reveals a deeper structural and social disconnect that continues to limit women's economic engagement. Without addressing this gap, our growth milestones risk becoming superficial targets.

This leads us to a deeper question: Are rural women conditioned to seek rural employment over urban, or is urban planning failing women? The differing socio-economic and infrastructural contexts of rural and urban India, perceived as two distinct worlds, shape female labour force outcomes in contrasting ways. According to PLFS 2023-24, over 92% of rural women workers were either self-employed (73.5%) or casual labourers (18.7%), predominantly engaged in agriculture.