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India’s Economy: The Other Half

February 22, 2012

By Karl F. Inderfurth, Persis Khambatta

2011 was the centenary year of International Women’s Day, and much attention was paid to their rising role in the global political and economic landscape. Many expect that in Asia’s current economic growth, women’s economic involvement will rise with it – a fact true for some but quite untrue for others.

India is a dominant force in Asia’s economic growth and home to the world’s second-largest workforce – some 478 million people. As its economy develops to encompass new knowledge-based industries, and as its population moves from rural to urban areas, a pivotal issue should be given greater scrutiny: Are India’s women poised to take part in the rapidly expanding economy? And what will the consequences be for India’s economic development?

Despite having one of the most progressive federal constitutions and an extraordinary track record of economic growth since the early 1990s, the participation of women in India’s economy is still disappointingly low. While women have been somewhat successful in Indian political life – in parliament, as chief ministers and as cabinet-level officials, and in the panchayat system – they have not been nearly as active in its economic life. India’s economic growth is remarkable in its reach and impressive for pulling millions out of poverty, but women are still missing at virtually every level of professional life.

Development data repeatedly reinforces the point that investing in women’s health and education results in poverty alleviation, increased development, and healthier, better-educated children. Investing in women is investing in communities and nations. Melanne Verveer, the head of the U.S. State Department’s Office of Global Women’s Issues, calls women “the lowest hanging fruit” in order to achieve economic growth. Verveer also notes a UN study, which states that the Asia-Pacific region “is shortchanged between 42 and 47 billion dollars a year in GDP because of the untapped potential of women.”

The loss in GDP that India incurs as a side effect of low female economic participation is a major drag on its overall economic performance. Lakshmi Puri, the assistant secretary-general of UN Women, noted in 2011 that India’s growth rate could jump by 4.2 percent if women were given more opportunities. That would push India’s current growth rate of about 7.5 percent closer to 11 percent, making it, once again, one of the world’s fastest accelerating economies.

The World Economic Forum’s Global Gender Gap Report, sourced from over 600 employers, states that India has the lowest percentage of women employees (23 percent). Overall, India ranks close to the bottom (113 out of 135 countries). The World Bank’s recent report, “More and Better Jobs in South Asia,” states that the female employment rate in South Asia “is among the lowest in the developing world… Participation rates are particularly low in the three largest countries: Pakistan, where almost four out of every five women do not participate in the labor force, and Bangladesh and India, where slightly more than two out of every three do not do so.” Two out of every three women in India are not employed. Can India afford this?

Download a PDF of the full article, originally published in the Center for Strategic and International Studies’ “U.S.-India Insight” February newsletter.

Asia Foundation trustee Karl F. Inderfurth is the former assistant secretary of state for South Asian affairs and a senior advisor and Wadhwani Chair in U.S.-India Policy Studies at CSIS, and Persis Khambatta is a fellow at U.S.-India Policy Studies. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.


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