India wants to be the next China

India, the world’s fastest-growing major economy, stands at a critical juncture. As Prime Minister Narendra Modi embarks on his third consecutive five-year term, his vision of transforming India into a $5 trillion economy by the decade’s end faces significant hurdles. Despite the impressive growth trajectory, the country is not firing on all cylinders. One of the most pressing challenges is the underutilization of a significant segment of its population: women.

Economic Growth vs. Challenges

India’s economy has seen remarkable growth over the past decade. Under Modi’s leadership, it has become the world’s fifth-largest economy. However, the path to achieving the $5 trillion mark is fraught with obstacles. A narrower-than-expected election victory for Modi means that pushing through ambitious reforms will be challenging. The economic machinery is strained, and without addressing key issues, the goal may remain elusive.

Job Market and Women’s Participation

One of the critical areas needing attention is job creation, especially for women. India’s job market is vast, but it isn’t fully inclusive. Over 460 million women of working age, more than the entire population of the European Union, remain an untapped resource. Their integration into the workforce is crucial for driving economic growth.

Case Study: Gunasri Tamilselvan

Take the example of Gunasri Tamilselvan, a 22-year-old engineering graduate working at a Finnish electronics manufacturer in Tamil Nadu. Despite her qualifications and passion for her job, she faces cultural resistance at home. Her family is eager to arrange a marriage for her, a common practice in South Asia, which might force her to quit her job. Gunasri’s struggle is emblematic of the broader challenges faced by many Indian women.

Women in the Indian Workforce

Currently, only about one-third of India’s working-age women are active in the labor force, significantly lower than the global average of around 50%. This stark discrepancy highlights a substantial underutilization of human capital.

Economic Impact of Low Female Participation

The economic implications of low female workforce participation are staggering. According to the World Bank, India could boost its economic growth rate to 9% annually if women’s participation increased to 50%. The current contribution of women to India’s GDP is a mere 18%, one of the lowest in the world. This contrasts sharply with China, where women play a significant role in the economy.

Historical Context and Cultural Norms

India’s cultural norms have traditionally relegated women to domestic roles. This is slowly changing, but not fast enough. In contrast, China underwent drastic changes under Communist rule, where gender equality was heavily promoted. Chairman Mao’s famous declaration, “Women hold up half the sky,” led to significant improvements in female workforce participation.

Government Initiatives

Over the last decade, the Modi government has introduced several policies aimed at encouraging more women to join the workforce. Notable among these is the mandate of 26 weeks of paid maternity leave, surpassing China’s 98 days. However, these policies are not always enough to overcome deep-seated cultural barriers.

Corporate Efforts to Improve Diversity

Corporations also play a crucial role in improving female workforce participation. Companies like Tata Group and Foxconn have implemented successful initiatives to increase the number of women in their workforce. Tata Power’s solar cell and module factory, where 80% of the workers are women, is a prime example.

Challenges Faced by Working Women

Despite these efforts, women in India face numerous challenges, from cultural resistance at home to discrimination and harassment at work. Many women, even when highly skilled, opt to stay at home due to these pressures.

Benefits and Incentives for Female Workers

To counter these challenges, companies are offering various benefits and incentives. These include affordable housing, secure transportation, and workplace safety measures. For instance, Tata Power’s factory in Tirunelveli hires largely from the local community, enabling women to work without having to relocate, addressing safety and comfort concerns.

Comparison with China’s Model

China’s model of economic development heavily relied on female participation. The provision of dormitories and extensive support systems allowed women to contribute significantly to the economy. While India might not replicate this model fully, it can certainly draw valuable lessons.

Localized Economic Development

A notable strategy in Tamil Nadu is the decentralized growth approach. By distributing manufacturing clusters regionally, the state minimizes the need for large-scale migration and makes it easier for women to join the workforce without leaving their communities.

The Future of India’s Workforce

Looking ahead, increasing female participation in the workforce is essential for India’s economic aspirations. With the right policies, cultural shifts, and corporate initiatives, India can harness the potential of its women workforce, driving the economy towards unprecedented growth.


India stands at a pivotal moment in its economic journey. To achieve its ambitious goals, the country must address the significant challenge of underutilizing its female workforce. By fostering an inclusive environment, implementing effective policies, and encouraging corporate responsibility, India can overcome these hurdles and realize its full economic potential.

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