‘If more Indian women worked, $35 bn could be added to country’s GDP’


Chennai : If more Indian women worked, $35 billion dollars could be added to the country’s Gross Domestic Product (GDP) over the next five years, an economic analyst has claimed.

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The presence of more women in the workforce “could add $35 billion to (India’s) GDP over the next five years and make Indians five percent richer than otherwise projected by 2015 and 12 percent richer by 2025,” said Roopa Purushothaman, who was earlier a vice president with Goldman Sachs and is now head of research at Future Capital Holdings, an investment firm.

Seventy percent of women in countries like China and Vietnam worked compared to only 30 percent in India, she said, delivering a lecture Friday night on ‘Urbanisation and Gender Shifts’, hosted by the Madras School of Economics along with Sage publishers.

Purushothaman, who was one of the lead researchers at Goldman Sachs who had predicted the emergence of BRIC (Brazil, Russia, India, China) countries as economic powerhouses, said that India suffered from “distorted talent allocation”.

If all Indian states resembled Karnataka in terms of female to male ratios in managerial positions, the country’s economy over the period 1961-91 would have been higher by more than a third, she said.

“This would propel India ahead of Russia, Brazil and South Korea to be the 10th largest economy on a US dollar basis, translating into an income per capita of over $1,000 compared to $769 currently.”

Pointing out that the growth in women’s employment has been higher than for men in India for the period 2000-2005, she said 34.4 percent of rural women worked compared to only a fifth of urban women.

“The vast difference occurs in the category of the self-employed, where 32 percent of rural women work, compared to just 11 percent of urban women,” she said, claiming “bridging this gap will dramatically increase India’s GDP”.

Based on national surveys, Purushothaman predicted that less than 10 percent of India’s people will be absolutely “poor” and 50 percent of households will belong to the middle income group by 2016.

Terming it a “myth that rural India is not growing”, she said inequality (both economic and social) is worse in urban India than in rural India, based on data from the National Sample Survey Organisation.

Contrary to popular belief that huge migrations to cities was taking place, she said 60 percent of population growth in India’s cities “was natural (due to processes of births, better healthcare)” and demographic surveillance showed “only 18 percent increase was due to migration”.

Basing her thesis on an eight-month long NCAER (National Council of Applied Economic Research) study of India’s top 20 cities, Purushothaman urged policy makers to plan keeping in mind the story that numbers have to tell.

“Urbanisation in India peaked in the 1970s and has tapered off really. India may be developing in a different way, outside the cities, in fringe areas,” she said.

The top 20 cities in India have been classified as megacities like Delhi and Mumbai, tier two “boom” cities like Surat, Nagpur, Lucknow, Coimbatore and niche cities like Chandigarh, Faridabad, Jalandhar, based on a variety of growth indicators like spending habits and usages.