India losing out heavily on GDP due to gender inequality: Comparable to Middle-East?

Gender equity: Incremental GDP 2025 in full potential scenario

By Rajiv Shah
A recently-released study by one of the world’s most prestigious consultants, McKinsey Global Institute (MGI), has estimated that women in India contribute just 17 percent to the Gross National Product (GDP) as against 37 percent global average, as a result of which the country is losing out 1.4 per cent in terms of annual GDP growth.
The study says that, if India were to achieve its “full potential” of gender equity, the country could add an annual GDP to the tune of $2.9 trillion by 2025, which is 60 percent higher compared to what it calls "business-as-usual case."
However, as achieving "full potential" is not possible, MGI report, titled "The Power of Parity: Advancing Women's Equality in India", says, it has worked out another scenario, called "best in region scenario"gender equity, under which India can possibly could "boost annual GDP by $0.7 trillion, or 16 percent, in 2025 compared with a business-as-usual case, adding an incremental 1.4 percentage points each year to its GDP growth rate".
Pointing out that “women are currently particularly under-represented in India’s economy compared with their potential”, the study says, the 17 percent women’s contribution to India’s GDP stands in sharp contrast to China’s 41 percent, Sub-Saharan Africa’s 39 percent, Latin America’s 33 percent.
“Women in India only represent 24 percent of the labour force that is engaged in any form of work in the market economy, compared with an average of 40 percent globally”, the study says.
It adds, “India’s position on share of women in workforce is on a par with countries in the Middle East and North Africa (MENA), where, unlike India, legal provisions can restrict many forms of female employment in many countries.”

Gender equity: Incremental GDP growth 2025

Calculating Gender Parity Index (GPS) on the basis of four categories – equality in work, legal protection and political voice, physical security and autonomy, and enablers of economic opportunity, the study says, on a scale of 0.00 to 1.00, where a GPS of 1.00 indicates gender parity, India’s aggregate GPS is 0.48.
While this is “higher than the GPS of the rest of South Asia, excluding India (0.44), yet, regretfully, it is “about the same as that in MENA (0.48), and lower than the GPS of Sub-Saharan Africa (0.57)”, the study insists.
“The best performing region in the world in terms of overall GPS is North America and Oceania comprising Australia, Canada, New Zealand, and the United States with an aggregate GPS of 0.74”, the study says.
Not denying that “India’s economy would have the highest relative boost among all regions of the world if its women participated in paid work in the market economy on a similar basis to men”, the study believes, “However, it is unlikely that this scenario will materialize” because of the existing “barriers”.
“The below-potential contribution of women to India’s GDP today—measured by their share of paid work in the market economy—contrasts with their higher share of unpaid care work such as cooking, cleaning, and taking care of children and older members of the family”, the study believes.
While globally, women spend “roughly three times the amount of time spent by men on unpaid work”, in India, “the situation is more extreme—women perform 9.8 times the amount of unpaid care work than men”, it underlines.
“If that unpaid work were to be valued and compensated in the same way as paid work, it would contribute $0.3 trillion to India’s economic output. Much of this unpaid work may be done willingly and provide great satisfaction to women and welfare for their families”, the study calculates.

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