Manufacturing output to jump 9% if more women join workforce: World Bank

The report said that in all South Asian countries, output gains from closing the gender gap in labour force participation would be driven by the manufacturing sector, followed by the services sector

India's manufacturing output would increase by 9 per cent if more women joined the workforce, the World Bank said in its South Asia Development Update on Thursday. The global financier also maintained its gross domestic product (GDP) growth projection for India at 7 per cent in FY25 and 6.7 per cent in FY26. It forecast growth in South Asia at 6.4 per cent in 2024 on the back of India's strong domestic demand and quicker recoveries in Sri Lanka and Pakistan.

The Washington-based lender said that larger-than-expected agricultural output, and policies designed to raise employment growth were expected to contribute to strong private consumption growth, while growth in public consumption was projected to "moderate in line with budgeted fiscal consolidation”.

Citing its findings on female labour force participation in the region, the report noted that on average in four South Asian countries including India, the share of women employed after marriage was 12 percentage points lower than before marriage. The other three countries are Maldives, Nepal, and Bangladesh.

World Bank Vice-President for South Asia Martin Raiser said key policy reforms to integrate more women into the workforce and remove barriers to global investment and trade could accelerate growth. "Our research shows that raising female labour force participation rates in the region to those of men would increase regional GDP by up to 51 per cent,” Raiser added.

India's labour force participation rate (LFPR) for women, which represents the share of women working or seeking work, increased to 41.7 per cent in FY24 from 23.3 per cent in FY18, according to the latest July-June 2023-24 Periodic Labour Force Survey.

Manufacturing to be key gainer

The World Bank report said that in all South Asian countries, output gains from closing the gender gap in labour force participation would be driven by the manufacturing sector, followed by the services sector.

The World Bank said that female labour force participation in South Asia was among the lowest in the world. Only 32 per cent of working-age women were in the labour force in 2023, compared to 77 per cent of working-age men in the region.

“For all South Asian countries except Bhutan, female labour force participation rates in 2023 were 5 to 25 percentage points lower than in countries at similar levels of development.”

The report said that many barriers constrain women in the region, including unsafe transport, lack of childcare, and limited freedom of movement. These factors hinder women’s social and economic mobility and confine many to informal-sector roles with poor remuneration.

Helped by strong domestic demand, the report said that growth was on track to be higher than expected six months ago. “Global investors are seeking locations with low geopolitical risks and strong economic fundamentals, and the region, especially India, is well-placed to benefit,” the report said.

“South Asia’s female labor force participation rate of 32 per cent is well below the 54 per cent average in emerging market and developing economies,” said World Bank Chief Economist for South Asia Franziska Ohnsorge.

She said that increasing women’s employment required action from all stakeholders. “Our report recommends a multi-pronged effort where governments, the private sector, communities, and households all have a role to play.”