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Women’s participation in the labour force: It’s too risky to let it languish

India’s economy may stay in a low equilibrium if we do not act to resolve well identified restraints on women taking up employment. A comparison of urban and rural data shows that neither setting is working for women, even if the reasons differ.

As India inches closer to the $5 trillion economy mark with human capital playing a key role, a critical disconnect emerges in this growth story: the disparate contribution of women to the labour force and the economic loss therein.

According to the Periodic Labour Force Survey (PLFS) 2023-24, the literacy rate for urban women stood at 84.9%; yet their labour force participation rate (FLFPR) was only 28%. In contrast, the gap between literacy and work participation for rural women is smaller at 22 percentage points (see data graph).

While this imbalance is universal, even among developed economies like the US, Japan, Germany and Australia where female literacy rates are nearly 100%, there is an almost 40 percentage point gap between literacy and FLFPR (World Bank 2024).

However, developing nations like Vietnam and Bangladesh show a smaller gap of 25 points. India lies in between, with a gap of nearly 33 points (rural-urban combined) but with a lower female literacy rate (74.6% according to PLFS 2023-24).

This reveals a deeper structural and social disconnect that continues to limit women’s economic engagement. Without addressing this gap, our growth milestones risk becoming superficial targets.

This leads us to a deeper question: Are rural women conditioned to seek rural employment over urban or is urban planning failing women?

The differing socio-economic and infrastructural contexts of rural and urban India, perceived as two distinct worlds, shape female labour force outcomes in contrasting ways.

According to PLFS 2023-24, over 92% rural women workers were either self-employed (73.5%) or casual labourers (18.7%), predominantly engaged in agriculture.

In contrast, only 42.3% urban women were self-employed, seeking jobs in the services sector, a domain that—as the World Bank notes—offers women limited returns due to persistent barriers such as restricted mobility, informal work arrangements, concerns around workplace safety and prevailing social norms (South Asia Development Update, 2024).

These structural challenges contribute to what McKinsey described in 2018 as a “leaky pipeline,” where women enter the workforce but steadily drop out before reaching mid- and senior-level roles.

Further compounding this challenge is the role of caregiving, with national data showing women with young children were significantly less likely to be employed (Chatterjee, Desai & Vanneman, 2018; India Human Development Survey).

This effects an often irreversible FLFPR loss, evident among women with school-going children. One pertinent factor driving this trend is the lack of accessible and affordable childcare infrastructure in urban India.

Urban settings—where, according to the National Family Health Survey-5, 61.3% urban households are nuclear—often leave women without the familial support needed to balance caregiving and employment.

In contrast, rural India offers stronger community and family networks that help shoulder childcare responsibilities (Bhindi & Jangra, 2025).

Additionally, flexible work options such as self-employment and agricultural labour are more readily available in rural areas, enabling women to balance paid work and childcare through what Gautham (2022) terms the ‘It takes a village’ effect, unlike the rigid and demanding structure of the urban services sector, which offers fewer adaptable opportunities for working mothers.

There was a notable decline in labour force participation among rural women between 2005 and 2019.

This trend is particularly surprising when viewed against the backdrop of falling fertility rates, increasing consumption, rising household incomes and ongoing urbanization, as these are factors that should in theory support greater female participation.

So why have we seen the opposite?

As household incomes rise, deep-rooted cultural norms can take precedence, reinforcing traditional ideas that cast men as breadwinners and women as caregivers. If the financial need for a woman’s income diminishes, her economic participation can reduce further.

India’s rural FLFPR is persistently higher than its urban FLFPR, despite the latter’s education and infrastructural back-up. Instead, what seems to grow with urbanization is invisible labour.

According to the Time Use Survey 2024, Indian women spend an average of 289 minutes per day on unpaid domestic work, compared to 88 minutes for men.

Urban women, in particular, are burdened with the challenge of juggling professional and domestic responsibilities, often without structural support.

This invisible weight leads to time-bound underemployment, where women may want to work but are unable to find opportunities that align with their caregiving obligations.

These unobserved nuances continue to hold back industrious female employment, both in rural and urban landscapes. Further, the post-covid rise in our rural FLFPR can be partially attributed to crisis-driven fallback strategies, uncharacteristic of provident long-term solutions.

The World Bank estimates that closing the gender gap in employment could boost global GDP by more than 20% (Women, Business and the Law, 2024). But this is as much about equity as it is about lost opportunity.

Increasing the FLFPR can make gender progress a key factor in economic output, address issues that women and children face, and enhance social development overall.

This requires redesigning our labour market with investments in public childcare infrastructure, promoting flexible work models and challenging the notion of caregiving as a woman’s exclusive burden as a few of the necessary steps.

A comparison of rural and urban data shows that neither setting is working for women, even if the reasons for this differ. We need to address our low women’s labour force participation to avert a growth story that may remain stuck in a low equilibrium.

The authors are, respectively, research associate and associate fellow, National Council of Applied Economic Research. Views are personal

Gender and Caste Nexus: Occupational Segregation across Indian Megacities

Ambedkar viewed urbanisation as an instrument for breaking down the rigid caste-based system prevalent in rural areas. However, the extent to which this holds true in contemporary India raises questions over whether people in urban settings can truly transcend the influence of the entrenched caste system. This paper examines the persistent issues of occupational segregation across gender and socio-religious groups in India’s six megacities. First, the paper measures and analyses the levels of occupational segregation across different gender and socio-religious groups, using relevant indices and segregation curves. Second, it assesses the factors contributing to occupational segregation within local markets, with a focus on socio-economic and demographic variables based on regression models. The analysis reveals that caste and religion continue to exert a stronger influence on occupational segregation than gender per se, with the SC/ST and Muslim communities—particularly women—facing the highest levels of exclusion. The study underscores the need for intersectional approaches to policy-making for addressing structural barriers and promoting equitable access to economic opportunities in urban India.

A Cross-Country Analysis of the Institutional Framework of Unclaimed Financial Assets with Special Reference to India

Unclaimed property (UP), including dormant financial and tangible assets, remains an overlooked area in global financial systems due to weak enforcement, fragmented regulations, and low public awareness. However, its growing volume and economic implications have prompted many countries to reform legal frameworks to enhance transparency and recovery. This cross-country study investigates the administrative and legal structures governing UP across selected systemically important jurisdictions, including India, the US, Canada, the UK, Australia, and emerging economies. The research examines dormancy periods, statutory provisions, post-dormancy procedures, and claim settlement processes, revealing a stark contrast between centralised, digital frameworks in developed economies and fragmented, often manual systems in developing ones. Unclaimed assets represent significant idle capital, which if reintegrated, could boost economic productivity and individual financial well-being. The study highlights the urgent need for harmonised legal standards, proactive due diligence, digital claim infrastructure, and targeted awareness campaigns. These steps are essential not only for efficient asset recovery but also for reducing financial opacity, improving institutional accountability, and fostering inclusive economic growth.

Weaving opportunities

India can be a global leader in technical textiles.

With nearly 2 per cent of the contribution to the country’s GDP, India is the sixth largest exporter of textiles globally and holds 3.9 per cent share in world textile exports. The sector provides direct employment to over 45 million people and indirect jobs to over 100 million people (Ministry of Textile 2023-24). Estimated to touch $350 billion by 2030, the Indian textile industry is expected to create 3.5 crore jobs.

However, the National Accounts Statistics 2023-24 shows that the share of manufacture of textiles and cotton ginning in the country’s GVA has been almost stagnant during 2013-18 and 2018-24, reflecting a CAGR of (-) 1 per cent. While the traditional sub-segments of the textile sector are facing glitches over the years, the new niche segments (technical textiles) are carving new paths. Further, the ongoing political un-rest in Bangladesh has opened up both risks and opportunities in sustainable textiles, organic cotton, and eco-friendly manufacturing in India. While traditional textiles remains vital, the rise of technical textiles has opened a key opportunity.

Advanced tech

Technical textiles is an advanced technology used for various applications ranging from automobiles to space applications. The demand for sustainable textiles is increasing particularly for applications such as packtech (biodegradable jute sacks), indutech (conveyer belts, etc.), hometech (blinds, fire-resistant curtains, etc.), meditech (non-woven absorbent pads) and sportstech (wearable technology for sports and fitness applications). Further, the 3D non-woven textiles have expanded the industry’s reach into automotive, aerospace and protective gear manufacturing.

While the Indian technical textile industry is experiencing strong growth of 10-12 per cent (CAGR), the market is projected to grow from $29 billion in 2024 to $309 billion by 2047. The country has also become a net exporter of technical textiles recording a growth of 5.3 per cent CAGR from $1.99 billion in 2019 to $2.59 billion in 2024. The penetration rate is expected to increase from 13-20 per cent in 2026 to 40-60 percent by 2047.

The government has introduced a range of policies, including the National Technical Textiles Mission (NTTM) and Production Linked Incentive (PLI) scheme, to give a boost to this sunrise sector. While the NTTM focusses on research and innovation, market growth, exports, PLI focuses on enhancing scale of production. The PM MITRA scheme has sanctioned seven integrated textile parks to improve infrastructure, supply chains and production efficiency. The government is reducing duties on new types of textiles machinery and correcting inverted duty structure to boost exports. Lastly, the government is focussing on creating jobs and skilling.

Over the next five years, the government aims to accelerate its market growth at 10-15 per cent. The NTTM plans to create 50,000 jobs.

This sector needs new range of skills starting from training in automation and digital technologies in manufacturing processes to a focus on sustainable practices.

However, the need of the hour is to strengthen the existing curriculum of textile engineering courses and making them more industry oriented, updated and practical, allowing students to make choices in their specific expert areas. The curriculum designing stages should involve active participation from industry professionals and offer industry internships or on-the job training to expose students to latest technologies and processes. These courses may be developed in collaboration with international universities that run more comprehensive technical textile engineering courses.

With better awareness, sufficient infrastructure, improved domestic machinery production and skilling, India has the potential to become a global leader in technical textiles.

Jain is Fellow, and Bhandari is Professor, at NCAER. The views are personal.

How developing countries are turning climate risk into economic opportunity

Jharia’s master plan is the £511m investment that climate finance cannot see.


The most serious constraint on climate finance in developing countries today is not simply a shortage of capital, but a persistent mismatch between how finance is structured and how climate action is pursued.

Public investments that reduce environmental risk, enhance economic resilience and deliver long-term development outcomes are underway across many low- and middle-income countries. Yet because they do not conform to narrow ‘mitigation’ or ‘adaptation’ classifications, these interventions remain outside the scope of most international climate finance. This reflects a deeper systemic issue: undervaluing economic transitions that are central to effective climate responses in developing economies.

This disconnect is evident in Jharia, a coal-dependent district in eastern India, where the government is implementing a long-term hazard mitigation programme to extinguish underground fires, stabilise land and relocate at-risk communities. The approximately £511m (or $692m) Jharia Master Plan, approved by India’s cabinet in June 2023, is not formally designated as a climate finance project, nor is it linked to carbon markets, despite its potential to reduce fugitive emissions and reshape spatial governance.

The plan falls through the gaps of existing climate finance frameworks because it straddles risk management, mitigation and adaptation in ways the current system is not designed to accommodate.

Jharia’s experience is not an outlier. Across a number of developing countries, resilience outcomes are being generated through domestic policy and public investment strategies that originate within development planning rather than environmental programming. However, the prevailing climate finance discourse continues to frame developing countries in terms of what they lack – capital, technology and regulatory capacity – rather than recognising the systems they are building in response to their own priorities.

What the numbers say

In Kenya, over 326,000 farmers supported through public initiatives have adopted improved agricultural practices, leading to an average 41% increase in yields across key value chains, according to the World Bank’s Climate-Smart Agriculture Project.

In Ethiopia, the national agricultural research system has developed rust-resistant wheat varieties that have delivered productivity gains of up to 40% in targeted areas. These efforts are institutionally led, fiscally embedded and adapted to local contexts. They directly reduce climate vulnerability but are not typically eligible for climate finance.

In Rwanda, the national Green Fund (FONERWA) has supported the development of local financial instruments aligned with climate goals. A green bond issued by Prime Energy Plc in 2023 raised £5.5m on the Rwanda Stock Exchange, demonstrating that even relatively shallow capital markets can mobilise long-term finance for climate-aligned infrastructure. Meanwhile, countries such as South Africa, Colombia and Mexico have introduced carbon pricing and environmental fiscal reforms that are now embedded within national revenue systems. These are not pilot projects – they are fiscal and regulatory shifts driven by domestic policy choices.

Financing as innovation, not just support

Yet these forms of institutional innovation remain largely unrecognised within mainstream climate finance frameworks. The World Bank’s 2020 report on coal mine closure emphasised that successful transition strategies require more than compensation or site remediation. They rely on coordinated land use, labour market strategies and institutional capacity. Where such components are missing, closure programmes tend to underperform. Where they are present, as in Jharia, their potential remains unrecognised by financial mechanisms that continue to prioritise narrowly defined mitigation activities.

Jharia remains an active coal mining region. Its challenge lies in the management of accumulated risk and structural distortion. The master plan includes social infrastructure, resettlement, skills development and land-use management – measures that collectively signal a shift in how the state is managing environmental risk. The programme is funded through public expenditure and led by national and state institutions. Yet its climate impact remains invisible in formal reporting. Methane and carbon dioxide released from underground fires are not accounted for in India’s national emissions inventory. Nor are avoided emissions from suppression efforts quantified or monetised.

This omission has fiscal and institutional consequences. Without recognised carbon accounting, the intervention cannot access carbon markets, nor can it attract outcome-based or performance-linked finance. A substantial public programme remains disconnected from the financial tools that could reinforce its long-term objectives. This is not simply a missed opportunity for revenue – it reflects a structural problem within the international system, which continues to reward technical interventions while undervaluing governance-based solutions.

Integrated approaches

Multilateral development banks have, in recent years, advocated for more integrated approaches to just transition. Some institutions have begun to pilot mechanisms that reward outcomes across labour, land use and energy governance. But these mechanisms remain limited in scale, often designed as demonstration projects. The operating logic of climate finance remains heavily tilted towards siloed mitigation projects, which sidelines integrated programmes like Jharia’s.

The impact of this approach is evident in global finance patterns. The Climate Policy Initiative’s 2023 Global Landscape of Climate Finance notes that less than 20% of total climate finance reaches low- and lower-middle-income countries, despite their acute exposure to climate risk. Where finance is available, disbursement is often constrained by fragmented donor governance and rigid project templates that fail to accommodate cross-sector strategies.

Jharia demonstrates that meaningful public investment need not originate in climate ministries or development banks. It also shows that emissions reduction and resilience can be achieved through public administration, land governance and institutional reform. Recognising and scaling such approaches will require a shift in how climate finance is designed and evaluated. That includes developing methodologies for quantifying avoided emissions in unconventional settings, funding mechanisms that reflect the time profiles of institutional reform and a greater focus on how public institutions shape outcomes.

There are early signs of this shift. Several countries are consolidating fragmented investments into national transition frameworks. Others are experimenting with devolved finance and performance-based disbursement. Yet the dominant climate finance architecture still treats mitigation, adaptation and just transition as distinct tracks. This makes it difficult to fund interventions that operate horizontally – across institutions, over time, and through non-technical channels.

Jharia is not a mitigation project in the conventional sense. It is a governance-led response to cumulative risk. Carbon credits will not extinguish its fires, but ignoring the mitigation value of those efforts perpetuates the gap between national action and international recognition. If climate finance is to support transitions that are durable and inclusive, it must evolve to accommodate precisely these kinds of interventions: institutionally grounded, locally designed and systemically significant.

Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, Senior Non-Resident Adviser at the Bank of England, Senior Adviser of the International Forum for Sovereign Wealth Funds, and Distinguished Fellow at the Observer Research Foundation America.

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