Closing the gender gap at work could unlock billions for the economy

India could unlock an additional 1% of GDP growth by increasing female labour force participation to 50%, underscoring the immense economic potential of integrating more women into the workforce, according to Anna Bjerde, managing director of operations at the World Bank.

In an exclusive conversation with CNBC-TV18, Bjerde highlighted key economic priorities and growth levers that could propel India towards its ambitious goal of becoming a high-income economy by 2047.

Harnessing women’s economic potential

One of the most significant opportunities for India’s growth lies in increasing the participation of women in the workforce, Bjerde noted. “If India increases female labour force participation from 35.6% to 50%, GDP could go up by 1%,” she stated, emphasising that this could be a game-changer for the country’s economic trajectory.

A 1% boost in GDP for a nation of India’s scale translates into substantial economic gains, creating more jobs, driving higher incomes, and fostering inclusive growth.

The World Bank’s analysis suggests that policies aimed at improving education, workplace conditions, and social support systems for women could play a crucial role in achieving this target.

India’s growth story and future challenges

India has demonstrated remarkable economic resilience, with an average growth rate of 6.6% between 2000 and 2019. Despite the global disruption caused by the Covid-19 pandemic, India rebounded strongly, registering an average growth of 7.8% over the past three years.

However, sustaining and accelerating this momentum will require strategic interventions. The World Bank’s latest projections suggest that to achieve its “Viksit Bharat” vision by 2047, India will need to maintain an annual growth rate of around 8%.

Bjerde identified three key areas that could help India sustain high growth:

1. Investment boost: Raising the investment-to-GDP ratio from the current 33% to 40% over the next decade could significantly enhance economic expansion.
2. Labour market reforms: Increasing overall labour force participation, particularly among women, could unlock additional growth potential.
3. Productivity gains: Accelerating technological adaptation and innovation would be critical in boosting efficiency and competitiveness.

Global economic headwinds and trade challenges

Beyond India, Bjerde addressed broader global economic concerns, including slowing growth, rising trade barriers, and mounting debt levels. While the global economy is stabilising, she cautioned that growth remains subdued, and emerging markets are facing increasing challenges.

On the issue of trade wars and protectionism, Bjerde noted that international economic cooperation remains vital. “A dynamic economic ecosystem where countries import and export freely is beneficial. It creates new markets, drives innovation, and improves overall productivity,” she said.

Debt and inflation concerns

The World Bank official also expressed concern over rising debt levels, particularly in developing nations. Many countries, especially in Africa, are struggling to service their debt due to high borrowing costs and economic shocks. “We are very worried about the level of indebtedness,” Bjerde admitted, pointing out that external shocks, including inflation and climate-related disasters, have further strained public finances.

On inflation, she acknowledged recent improvements but warned that any escalation in trade conflicts could disrupt this progress. “Any rise in inflation disproportionately affects the poorest, making it harder for them to escape poverty,” she said, stressing the importance of maintaining stability.

India’s path to a high-income economy

Despite global challenges, Bjerde remains optimistic about India’s long-term potential. She commended the country’s proactive approach to economic reforms and investment-driven growth. However, she reiterated that unlocking the full potential of India’s workforce—particularly by empowering more women to participate in the economy—could be a decisive factor in achieving sustained prosperity.

“With the right policies and strategic focus, India can not only achieve but exceed its growth aspirations,” she concluded.

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