Women’s Role in India’s Inclusive Growth: Unlocking Potential through Economic and Social Empowerment

The discourse on women’s role in inclusive growth situates itself within the framework of "gendered economic growth and financial inclusion." Women’s economic participation holds significant potential to foster equitable and sustainable development. However, the current contribution of women to India’s GDP remains disproportionately low at 18% despite comprising nearly 50% of the population. Drawing from NITI Aayog's recent report, "From Borrowers to Builders," this article analyses women’s participation in economic activities, access to credit, and entrepreneurship, mapping their role in India’s inclusive growth story while highlighting challenges and opportunities.

UPSC Relevance Snapshot

• GS-I (Indian Society): Role of women and women's organizations, population and associated issues, poverty and development.
• GS-III (Inclusive Growth): Financial inclusion, women entrepreneurship, employment generation.
• Essay: Topics on gender equality, economic growth, and social empowerment.

Institutional Framework: Key Actors and Initiatives

India's institutional ecosystem has made strides to enhance women's economic participation, largely built around financial inclusion and entrepreneurship. However, systemic barriers persist. The interventions integrate public and private partnerships to create pathways for women to transition from borrowers to builders of economic prosperity.

• Key Institutions:
  • NITI Aayog’s Women Entrepreneurship Platform (WEP): Builds an enabling ecosystem for women entrepreneurs.
  • National Rural Livelihood Mission (NRLM): Empowers 9 million Self-Help Groups (SHGs) to access credit and improve livelihoods.
  • PM SVANidhi Yojana: Provides capital loans to women street vendors; INR 5,939.7 crore disbursed by 2024.
• Major Financial Interventions:
  • MUDRA Yojana: Disbursed INR 2.22 lakh crore to 4.24 crore women in FY 2023-24 (Source: NITI Aayog).
  • CIBIL Monitoring: 27 million women actively track their credit information report (Source: CIBIL, December 2024).

Key Issues and Challenges

1. Limited Credit Access

• Women borrowers account for only 42% of total loans, with 36% relying on gold loans due to lack of collateral ownership (Source: NITI Aayog).
• Women under 30 years represent just 27% of retail credit uptake compared to 40% for men, highlighting age-specific barriers.
• Only 14% increase in business loans for women from 2019 to 2024 indicates slow entrepreneurial credit growth.

2. Regional and Sectoral Disparities

• 60% of women borrowers are from semi-urban or rural areas with limited access to institutional support.
• Female entrepreneurs predominantly operate in sectors like handicrafts and textiles, which are less remunerative.

3. Socio-Cultural Barriers

• Deep-rooted patriarchy restricts women’s decision-making autonomy, especially in financial matters.
• Lack of mentorship and social networks prevents scaling ventures beyond micro-enterprises.

4. Informal Employment Dependency

• High concentration of women in informal jobs with no access to employer-sponsored credit or insurance schemes.
• Structural barriers in the labor market limit women’s entry into formal, high-paying professions.

Comparative Table: Women's Financial Inclusion — India vs Global Landscape

Critical Evaluation

Despite targeted interventions, several flaws persist in the approach to integrating women into the mainstream economy. Access to credit for women entrepreneurs skews heavily towards personal finance and gold-backed loans, which do not translate into productive capacity building. Additionally, a lack of multi-pronged strategies that address gendered stereotypes continues to obstruct the pipeline for women in business leadership.

International benchmarks suggest that India lags in female workforce participation and institutional engagement, evidenced by the wide GDP and labor force participation gaps. While schemes like PMMY and NRLM catalyze grassroots-level female financial activity, their long-term impact is limited without addressing systemic issues such as education gaps, gender-sensitive workplace policies, and market linkages.

Structured Assessment

• Policy Design: While programs like PMMY and WEP are structurally sound, the policy reach remains skewed towards rural SHGs, neglecting urban entrepreneurial ecosystems.
• Governance and Capacity Issues: Inadequate monitoring mechanisms in credit disbursement lead to dependency on non-productive loan categories like gold loans.
• Behavioral/Structural Factors: Long-standing cultural biases and the digital gender divide impede the effective implementation and uptake of government schemes.

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