Last Updated: Feb 2025 (Female Labour Force Participation Rate (India))
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Female Labour Force Participation Rate (India)
This article deals with ‘Female Labour Force Participation Rate (India).’ This is part of our series on ‘Society’ which is important pillar of GS-1 syllabus . For more articles , you can click here.
Introduction
Earlier, the Female Labour Force Participation Rate (FLFPR) was continuously decreasing. But that trend has reversed now and Female Labour Force Participation Rate (FLFPR) has increased from 23.3% in 2017-18 to 41.7% in 2023-34 (according to PLFS).
The increase is FLFPR has been seen across the states.
But, women are underrepresented in white-collar and blue-collar jobs and dominate the pink-collar jobs (like nursing and teaching).
Feminization U-Hypothesis
Above trend can be explained with the help of the phenomenon of Feminization U-Hypothesis
With development,
- Women’s labour force participation drops during the initial phase of industrialization (as women don’t have the skills required for new jobs and start to invest in education to acquire skills needed for new jobs).
- However, in the long run, their labour force participation will increase once a certain level of development is reached.
Barriers for Women to join Work Force
Although FLFPR has increased, various barriers stop women from joining the workforce. These include:-
- Social Causes
- Patriarchal Mindset: Patriarchal norms of Indian society and social constraints on the freedom of women result in lower LFPR among women
- Nuclearization of families: Childcare and household work restrict women’s work participation.
- Caste factor: In some upper castes, a stigma is attached to women working outside the home.
- Entry Barrier: Many sectors, like the Armed Forces, weren’t open to women till recently.
- Lack of Care Economy: India has low levels of investment in Early Childhood Care and education. Hence, women can’t join the workforce due to caregiving responsibilities.
- Unpaid Household Work: Economists distinguish between production for self-consumption and production for the market. Only the latter is counted as ’employment’. Most women work at home, but it is not counted in labour force participation since it is unpaid.
- Use of overly broad categories: While measuring employment, productive works such as poultry farming and collection of firewood are considered domestic duty and women involved in such works are considered out-of- labour-force category.
- Rising incompatibility of work: Due to structural change in the Indian economy, skilled jobs in the service and construction sectors are coming up, but women don’t have the necessary skills for these jobs.
- Higher Education: As women pursue higher education, their entry into the job market is delayed (Feminization U-Hypothesis (explained below)).
- An income effect of the husband’s higher earnings: The rise in men’s income has resulted in women’s withdrawal from the labour market.
- Violence against women forces women to move out of the labour force. E.g.:
- Violence against women in the workplace restricts their participation.
- The mode of transportation is not safe for women restricting their movement.
- Problems like looking after young children, lack of crèches facilities at the workplace etc. force working mothers to quit their job.
Importance of Women in Work Force
- Economic Growth and Prosperity: The inclusion of women in the workforce positively impacts national economic growth.
- Empowerment and Decision-Making: Women’s employment empowers them financially and boosts their say in household decision-making. For example, the National Family Health Survey (NFHS) shows that employed women tend to have more say in family matters.
- Social Indicators Improvement: Higher LFPR improves social indicators such as infant and maternal mortality rates.
- Demographic Dividend: India’s demographic dividend can be fully realized with a substantial participation of women in the workforce.
- Diverse Perspectives and Innovation: Women’s participation brings a range of perspectives to the table, fostering creativity and innovation.
Steps taken to increase FLFPR
Skill Upgradation
- Skill India Mission: Women are provided with a special focus under the Skill India Mission.
- STEP Scheme: STEP or Support to Training and Employment Program for women provides skills to women to increase their employability or to make them self-employed.
Entrepreneurship
- Stand-Up India Scheme: It promotes entrepreneurship among women (and SC/ST). Women can avail of Rs. 10 lakhs to 1 crore collateral-free loans from Indian banks to start greenfield enterprises in the non-farm sector.
- Start-Up India: Various female led Start-Ups have received government support under the Start-Up India initiative. Additionally, 10% of the Fund of Funds for Start-Ups is reserved for women.
- Credit Guarantee Scheme for Start-Ups (CGSS): Scheme has guaranteed loans of Rs.24 crore for women led Start-Ups as of Jan 2025.
- Nandini Sahakar Scheme: 2% interest subvention is given to women led innovative cooperative projects
- Marketing Support: Women’s trade fair participation to market their products is fully subsidised by the government.
- ZED Certification: 100 per cent subsidy on certification for women MSMEs.
- Procurement: 3% of procurement by CPSEs is reserved for women-owned enterprises.
Maternity Leave Benefits
- The Maternity Leave has been increased to 26 months from the existing 12 months.
Stopping Gender Disparity
- Code on Wages: It prohibits wage discrimination on the grounds of sex.
- Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (PoSH): It enhances the safety of women at the workplace.
State Specific Schemes
Kerala: Smart Kitchen Project
- It was launched by the Kerala government in 2021.
- Under the scheme, soft loans are given to women to modernize their kitchens. These loans can be paid back in small instalments.
- It helps to increase women’s participation in labour as their time and energy spent on household chores decrease.
Telangana: WE Hub (Women Entrepreneurs Hub)
- It is Telangana state led incubator for women entrepreneurs.
- It ensures that women Start-Ups have access to technical, financial, governmental, and policy support.
- Till 2025, it has raised ₹177 crore and incubated 6376 start-ups.
Digital Economy and increase in FLFPR
Women face challenges in accessing the traditional job markets due to social causes, time restrictions, workplace safety, etc. (as mentioned above). However, the development of the digital economy has positively impacted women’s participation as the digital economy allows remote working. In the digital world, gender does not matter as much as in the physical economy.
Steps ahead
- Promote Women-owned Enterprises in Rural India.
- Bangladesh Model: Promote the Apparel & Shoes Sector as these two sectors generate the highest number of jobs for women per unit investment.
- Open more sectors for women, like Defence Services.
- Green Workforce: The Renewable Energy sector can create many jobs for women. For example, the Solar Urja Lamps project in Dungarpur, Rajasthan, to provide an economical and sustainable solar lighting solution where Women’s Self-Help Group (SHG) members were trained, resulting in the employment of 83 women and the establishment of five solar shops.
- Skilling women so that they can fit in the post-LPG Reforms economy.
- Promote woman entrepreneurship: Via Standup India and many other schemes.
- Maternity Benefits: The government has already increased Maternity Leave to 26 weeks. Steps should be taken to extend it to the informal sector as well.
- Self Help Groups (SHGs) like Kudumbshree should be promoted to make women, especially in rural areas, self-employed.
- Japan Model (Womenomics): It includes getting more women into leadership positions.
- Reshaping societal attitudes and beliefs about women’s participation in the labour force.
- Recognize the unpaid household work of women in the employment data.
Side Topic: Low proportion of Women in Leadership Roles in India
- Women’s representation on company boards in India is very low at a mere 18.3% (as of 2023). But this number is gradually increasing, which is a very positive sign. Women head many big corporates, for example, Pepsi by Indra Nooyi, Axis Bank by Shikha Sharma, etc.
- In 2021, Germany made it mandatory for large listed firms to have at least one woman on their boards.
- Under the SEBI regulations in India, the listed firms must have at least one female director on the Board of Directors.
Reasons for the lack of women in leadership roles
- Glass Ceiling Effect: It restricts the promotion of women to the topmost positions. This glass ceiling exists due to the persistence of patriarchy in society and also since the present leadership consists of men who promote the interests of men only.
- Leaky Pipeline Effect: The proportion of women decline as management grade rises