A 7.8% economy that runs on unpaid women

This article is authored by Adarsh Ashok, public policy professional and Aditya Ashok, public policy consultant, Government Advisory.

Two numbers were released within a fortnight of each other this year, and they point in opposite directions.

Working women (Images: Shutterstock)

The first is the one everybody discussed. India's real GDP grew 7.8% in the April-June quarter, comfortably ahead of the Reserve Bank of India's 7% projection. Manufacturing expanded 9.2%, services 10%, and gross fixed capital formation nearly 12% in real terms. For a quarter that absorbed an oil shock, a nervous rupee and an unresolved tariff negotiation with Washington, it was a genuinely strong print.

The second number was released by the same ministry, three weeks earlier, and made no headlines at all. The Periodic Labour Force Survey's quarterly bulletin for the same April-June period found that the labour force participation rate had fallen to 54.6%, down from 55.5% in the preceding quarter and 0.4 percentage points lower than a year ago. Rural participation dropped from 58.2% to 56.9%. Fewer Indians, proportionally, were working or looking for work in the quarter the economy grew at 7.8% than in the quarter before it.

Both numbers are produced by MoSPI. Both are probably correct. The gap between them is the story.

Two portraits of the same woman

Nowhere is that gap wider than in the data on women. Depending on which official series you consult, India has either achieved a historic breakthrough in female employment or is quietly losing ground.

The annual PLFS, which measures activity over a full year, shows female labour force participation rising from 30% in 2019-20 to about 40% in 2025 - a rural surge from 33% to 45.9%, against a far more modest urban move from 23.3% to 27.7%. On these numbers, India has added tens of millions of women to its workforce in five years.

The monthly bulletins, which ask what a person did in the preceding week, tell a flatter story. Female participation stood at 32.8% in May 2026, down from 33.2% a year earlier. Urban female participation was 24.8% - meaning three of every four working-age women in Indian cities are outside the labour market entirely.

The methodological explanation is well understood: the annual survey captures intermittent and seasonal work that a seven-day window misses. But the more interesting question is not which number is right. It is what kind of work is visible in one frame and invisible in the other. Work that appears when you look across a year and vanishes when you look across a week is, almost by definition, irregular, seasonal and unremunerated.

The composition data confirms it. Over 70% of rural women in the workforce are self-employed, and close to a third are unpaid contributing family workers in household enterprises. Only 9.3% hold a regular wage or salaried job. Between 2018-19 and 2022-23, the share of women in self-employment climbed from 53.4% to 65.3%, and the share in unpaid family labour from 30.8% to 37.5%.

Look at the categories women moved between and the picture sharpens further. Between 2017-18 and 2023-24, the proportion of women reporting their principal activity as domestic duties fell sharply, from 57.8% to 35.7%--a statistic that reads like emancipation. Over the same period, "helper in household enterprise" rose from 9.1% to 19.6%. Many women did not leave unpaid work. They were reclassified within it. What changed was the enumerator's category, not the woman's bargaining power.

Development economics has a standard expectation: As an economy grows, labour moves out of agriculture into manufacturing and services, and productivity rises with it. Indian women are moving the other way. The share of rural women working in agriculture rose from 71.1% in 2018-19 to 76.9% in 2023-24, even as their presence in industry and services thinned. Economists have a term for it - reverse structural transformation - and it is not a compliment.

The mechanism is not mysterious. Rural men migrate to cities for wages. The farm and the family enterprise still need hands. The wife, mother or daughter-in-law supplies them, without a wage, and the survey records her as employed. India's employment elasticity - the rise in employment for each 1% of GDP growth - has hovered around 0.4, well short of the 0.7 that East Asian economies managed during comparable growth phases. A workforce expanding into unpaid roles is one reason why.

This is where the labour data and the GDP data stop contradicting each other and start explaining each other. Unpaid work generates output. It does not generate income. And income, not output, is what a household spends, saves and borrows against. The Economic Survey has estimated that women's unpaid care work alone is worth about 3.1% of GDP - value the national accounts partly capture and the family budget never sees.

Which brings us to the balance sheet. The RBI's June 2026 Financial Stability Report put household debt at 45.5% of GDP, a record, up from roughly 33% in 2018-19. Non-housing retail loans - largely unsecured, largely for consumption - now account for 58.4% of household borrowing. And gold loans have grown at a compounded 42.4% a year since March 2024, with ₹5.14 lakh crore outstanding by May 2026.

That last figure deserves more attention than it gets. In most Indian households, gold is not an investment instrument. It is stridhan - the one asset a woman is likely to own outright, and the family's collateral of final resort. A 42% compound growth rate in pledging it, during a quarter of 7.8% growth, is not a story about financial deepening. It is a story about what households reach for when income does not stretch.

The Prime Minister has been urging Indians to save more. It is reasonable advice offered to households that are, by the central bank's own account, borrowing to consume while their cushion thins.

None of this makes the 7.8% fake. Investment is genuinely rising; capacity is genuinely being built. And some of the increase in women's own-account work is real entrepreneurship, not distress. A column that denied that would be as selective as one that celebrated the headline alone.

But if the objective is growth that households feel, three things follow. Care infrastructure - creches, elder care, water and fuel access - is not welfare spending but labour supply policy; it is what converts a woman's unpaid hours into hours she can sell. Rural non-farm employment has to expand faster than agriculture reabsorbs women, or the reverse transformation continues. And India needs a current national time-use survey, because a statistical system that cannot distinguish an unpaid helper from a woman doing domestic duties will keep producing participation rates that rise while lives do not change.

A fast-growing economy that cannot pay its women is not yet a developed one. It is a rehearsal.

(The views expressed are personal)

This article is authored by Adarsh Ashok, public policy professional and Aditya Ashok, public policy consultant, Government Advisory.