Why manufacturing is critical to bring more women into formal workforce

Why manufacturing is critical to bring more women into formal workforce

Additionally, a 10-percentage-point rise in female labour force participation would raise output by 15 percent.



India, which will soon overtake China as the world’s most populous nation, needs to unleash its manufacturing potential to boost economic growth and bring millions of women into the formal workforce.

“The key to unlocking India’s demographic potential is to develop the manufacturing sector, which would have the dual benefit of lifting productivity and also bringing millions more adults ― particularly women ― into formal work,” Shilan Shah, Deputy Chief EM Economist at research house Capital Economics, said in a recent note.

Manufacturing growth has been the major driver of higher female employment in Asian countries ranging from Taiwan to Vietnam to Bangladesh, Shah added.

At just 20 percent in 2021, the so-called female labour force participation in India fares poorly not just compared to East Asian economies but even to deeply conservative countries such as Saudi Arabia.

Some argue that this misrepresents the true situation. A large share of women engaged in economic activity aren’t counted in the labour force participation. But that just reinforces the point that many women are unable to escape low-productivity, informal work, Capital Economics said.

Unlocking potential

Prime Minister Narendra Modi’s administration has