The Economic Survey 2024-25 highlights a shift in India’s workforce distribution, with agriculture maintaining dominance while industry and services sectors see a decline in employment share.
A significant rise in female labour force participation, especially in rural areas, has been driven by government initiatives, skilling programs, and entrepreneurship support, underscoring the need for policy interventions to sustain and enhance women’s workforce engagement for inclusive economic growth.
Sectoral Distribution Of Workforce
- Dominance of Agriculture: The Periodic Labour Force Survey (PLFS) 2023-24 indicates that agriculture remains the primary employment sector, with its workforce share increasing from 44.1% in 2017-18 to 46.1% in 2023-24.
- Decline in Industry and Services: The employment share in the industry and services sectors has decreased. Manufacturing employment dropped from 12.1% to 11.4%, while the services sector declined from 31.1% to 29.7% over the same period.
- Gender-Based Employment Trends: Female participation in agriculture surged significantly, rising from 57.0% in 2017-18 to 64.4% in 2023-24. Conversely, male involvement in agriculture decreased from 40.2% to 36.3%, with men shifting towards sectors such as construction, trade, hospitality, transport, and communication.
- Rural Employment Patterns: In rural areas, female employment in agriculture increased from 73.2% in 2017-18 to 76.9% in 2023-24. Meanwhile, male participation in agriculture declined from 55.0% to 49.4%, indicating a movement towards non-agricultural occupations.
- Urban Employment Trends: Women in urban settings predominantly work in services, although their share fell from 44.4% in 2017-18 to 40.1% in 2023-24. Women are also significantly employed in manufacturing, trade, and agriculture. Urban male workers are primarily engaged in manufacturing, construction, and trade-related services.
Rise In Female LFPR: Harnessing Women’s Economic Potential
- Steady Growth in FLFPR: The female labour force participation rate (FLFPR) has steadily increased over the past seven years, from 23.3% in 2017-18 to 41.7% in 2023-24, primarily driven by greater rural female participation. This increase has significantly contributed to the overall improvement in labour market indicators.
- State-Wise Trends: The FLFPR has risen across various states. In 2017-18, 20 states and union territories (UTs) had an FLFPR below 20%. By 2023-24, this number had reduced to just three. Currently, 21 states report FLFPR between 30-40%, while seven states/UTs have FLFPR above 40%, with Sikkim leading at 56.9%.
- Rural Contribution to FLFPR Growth: The surge in FLFPR is largely due to an increase in rural female participation, which grew from 24.6% in 2017-18 to 47.6% in 2023-24. This rise is attributed to women capitalizing on opportunities created by various government initiatives aimed at enhancing female workforce participation.
Women-Led Entrepreneurship: Expanding Economic Opportunities
- Recognized Startups: Women have emerged as major beneficiaries of entrepreneurship programs. As of October 31, 2024, a total of 73,151 startups with at least one female director have been recognized under the Startup India Initiative, constituting nearly half of the 1,52,139 startups supported by the government.
- Financial Investments: ₹3,107.11 crore has been invested in 149 women-led startups through Alternative Investment Funds (AIFs). The Start-up India Seed Fund Scheme (SISFS) has approved ₹227.12 crore for 1,278 women-led startups since its launch in April 2021.
- Credit Support for Women Entrepreneurs: Under the Credit Guarantee Scheme for Startups (CGSS), ₹24.6 crore in loans has been guaranteed for businesses led by women. These schemes provide financial assistance, training, and mentorship to enable women to establish and scale their businesses successfully.
Factors Influencing Female Labour Force Participation
Enhanced Workforce Representation:
The PLFS 2023-24 highlights increased female participation in economic activities across both rural and urban areas. A more comprehensive method of capturing unpaid female labour in surveys has contributed to this rise.
Government Initiatives:
The increase in rural FLFPR is largely linked to initiatives such as the Deendayal Antyodaya Yojana – National Rural Livelihood Mission (DAY-NRLM), which offers skilling programs and financial access to women’s collectives, promoting diversified livelihoods.
Addressing Systemic Barriers:
The Economic Survey 2023-24 points out various obstacles restricting women’s employment opportunities. To sustain their workforce participation, state governments must eliminate restrictions on women in specific occupations and address barriers like childcare responsibilities by providing adequate childcare facilities and crèches.
Skill Development and Industry Alignment:
Policies should focus on targeted skill development and encourage women’s transition into emerging sectors. Aligning skill programs with industry demands and implementing a long-term strategy for women and girls will equip them for evolving job markets.
Women-Led Development for Economic Growth:
To achieve gender parity and inclusive economic progress, it is essential to reshape the labour market with an emphasis on women-led development. This approach will help India harness its demographic advantage while fostering economic empowerment for women.