Gender parity to boost India’s GDP by $770 billion
A study by McKinsey Global Institute suggest that India can improve its GDP by 18% by addressing the gender inequality.
Earlier this year, International Monetary Fund’s Chief, Christine Lagarde and Norway’s Prime Minister Erna Solberg, in a joint paper, stated, “Raising women’s participation in the labor force to the same level as men can boost India’s GDP by 27 percent.” Now, according to a recent study conducted by McKinsey Global Institute (MGI) found that India could add $770 billion to its GDP annually in 2025, or 18% above business-as-usual GDP by realizing gender parity.
The Power of Parity: Advancing Women’s Equality in Asia Pacific, a research done by MGI, studied the economic cost of gender inequality and related issues. The study highlighted that advancing gender equality in the Asia-Pacific could add $4.5 trillion (a 12% increase in the business trajectory) to the region’s collective GDP by 2025. In absolute terms, at $2.6 trillion (a 13% increase) China would benefit the most. But in relative terms, India would get the most significant boost by addressing gender inequality that would add $770 billion (an 18% increase) to GDP.
Currently, Indian women contribute 18% to the GDP. In contrast, in China, women commit 41% to the GDP and constitute 44% of the workforce, and in Singapore, these figures are 39% and 45%, respectively.
In the Asia-Pacific region, women contribute 36% to GDP and make up 37% of the workforce, which is similar to the global figures of 36% and 39%. On gender equality at work, the six countries remotest from gender parity are Bangladesh, India, Japan, Nepal, Pakistan and South Korea. However, the entire region is facing the issue of the low participation of women in leadership positions. The only country that has achieved a female-to-male ratio of close to 1.00 on leadership indicator was the Philippines.
Across the Asia Pacific region, the report estimates that 58% of the opportunity ($4.5 trillion) would come from boosting the female labor force participation ratio, 17% from raising the number of hours women work and the remaining 25% from more women working in higher productivity sectors.