In a recent interview, the World Bank India chief emphasized the critical role of increasing female labour force participation in India's economic growth. The chief highlighted that this endeavour is a "low-hanging fruit" that could significantly contribute to India achieving its ambitious economic goals.
Currently, India's female labour force participation stands at around 25%, a figure significantly lower than the global average. To accelerate its economic growth and achieve its target of becoming a $5 trillion economy by 2028 and an advanced economy by 2047, India needs to sustain a growth rate of 8%. The World Bank India chief stressed that boosting female labour force participation could be a game-changer in reaching this goal.
The chief explained that increasing female labour force participation is not only beneficial for gender equality but also for the macroeconomy. According to the World Bank's analysis, elevating the female labour force to the national average of 50% could add an impressive 1% to India's GDP growth. This growth could be achieved without significant additional investments in equipment or capital, making it a highly efficient strategy for economic advancement.
Moreover, the chief pointed out that when women are employed and paid fairly, they contribute to increased demand, but this demand is met because more women are engaged in the workforce, ensuring a balanced economic cycle. This balanced cycle can help mitigate inflationary pressures, which is particularly important in the current global economic environment.
To realize this potential, the chief called for a concerted effort to reskill and equip women with the necessary skills demanded by the labour market. Aligning supply and demand for skills at the local level is essential to harnessing the full potential of female labour force participation.
In addition to addressing gender disparities, the interview touched upon India's broader economic challenges. The chief acknowledged India's robust growth rate of 7.2% in the previous year, with a projected growth rate of 6.3% for the fiscal year 2023-24. While these figures are impressive, India aims for even higher growth rates.
To sustain and accelerate growth, several key factors must be addressed. First, he emphasized the need for a conducive global environment. India's growth is closely linked to global factors, and challenges such as geopolitical tensions and supply-demand imbalances must be addressed collectively on a global scale.
Second, private investment is a crucial driver of economic growth, and efforts should be made to facilitate private investment alongside public investment. Private sector access to financing, particularly for micro, small, and medium enterprises (MSMEs), needs to be improved.
Furthermore, to boost manufacturing a sector often associated with job creation India should combine it with emerging technologies like Artificial Intelligence (AI) and Information Technology (IT). India has demonstrated global leadership in IT and is increasingly making strides in AI, making it well-positioned to harness these technologies to advance manufacturing.
The interview also highlighted the importance of adopting a state-level approach to manufacturing, addressing constraints and regulatory hurdles at the regional level. Additionally, connecting local and global investors, especially for modern manufacturing, can drive growth and job creation.
Finally, the World Bank India chief discussed the need for internal reforms within the World Bank itself. The institution is working to accelerate project preparation, approval, and implementation to achieve results more swiftly. Moreover, efforts are being made to leverage resources more efficiently by exploring financial engineering solutions to mobilize resources from external sources, including the private sector.
As India strives to realize its economic ambitions, it is crucial to focus on inclusive growth that harnesses the full potential of all its citizens, including its women workforce.
