Budget allocation alone won’t fix gender gap in India’s workforce

Pooja Sharma Goyal, Founding CEO of Udaiti, says, “That women’s work is necessary for economic growth is no longer a subject for debate. While women are entering the workforce in growing numbers, their share in formal employment has remained stagnant, and retention through life transitions continues to be a major challenge.”

The data underscores that challenge. More than half (52%) of NSE-listed companies still employ fewer than 10% women, even as India positions itself as the world’s fastest-growing large economy.

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According to the Udaiti Foundation, India’s total workforce expanded by 6% in FY25, while women’s employment grew by a modest 7%, a gap too narrow to shift participation at scale.

As Budget 2026 approaches, the question before North Block is no longer about skilling women for entry into the workforce, but how to keep them there.

The stagnation in female workforce participation highlights a larger economic risk. At the current pace, India is unlikely to meet its ambition of raising female labour force participation to 70% by 2047, a target seen as critical for inclusive and sustained growth.

Sectoral progress in women’s workforce participation

Data sourced from Udaiti CGG Dashboard FY24–25

Global and domestic policymakers have repeatedly underlined the stakes. Anna Bjerde, Managing Director of Operations at the World Bank, has said that raising female labour force participation to 50% could add 1 percentage point to India’s GDP growth, a meaningful boost as the country works towards high-income status by 2047.

Within India, Sumita Dawra, Secretary at the Ministry of Labour and Employment, has also stressed that higher women’s participation is central to long-term development.

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The consequences of exclusion are visible at the very top. The latest Hurun India Uth Series, which recognises accomplished entrepreneurs under the age of 40, features just 36 women compared with more than 400 men, reflecting how gaps in workforce participation eventually translate into leadership and wealth disparities.

In short, without a sharp rise in women’s participation, India’s growth story risks hitting a structural ceiling, one that Budget 2026 will be under pressure to address.

What can Budget 2026 realistically fix?

With gender-focused allocations at record levels, the next phase of budgeting is being seen as a chance to move from intent to outcomes.

The trajectory of higher women’s participation in India’s workforce might not be through a single policy announcement, but correcting the structural gaps that continue to hold women back.

Global experience suggests that such shifts require deliberate intervention. Navjot (Mallieka) Kaur, Director at Epiq Capital, says, “Women’s representation in corporate boardrooms is still below 20% in India. In European countries, this figure is between 33–40%.”

“This didn’t happen organically but was regulated,” she adds, underscoring the need for sustained public and regulatory support to minimise the gender gap.

That is where Budget 2026 can make a meaningful difference. Pooja Sharma Goyal points to three priority shifts.

• “First, the Budget can strengthen the foundations for women’s employment by investing in enabling infrastructure – safe and affordable mobility, women’s housing near job clusters, and care systems that reduce the drop-off after life and caregiving transitions.” These investments, she argues, directly address the biggest reasons women exit the workforce mid-career.
• The second lever is skilling with outcomes. “It (Budget) can accelerate job-linked skilling by backing demand-aligned training with clear pathways to placement, especially in growth sectors, and by supporting employers to build retention-friendly workplaces.”
• Finally, she explains that the Budget “ can make gender-disaggregated data a core input into economic planning, because what we can measure well, we can improve faster.”

Recent interventions offer proof of great results with higher inclusion. Udaiti’s district-level diagnostics in Uttar Pradesh and shop-floor reforms in firms such as Dr Reddy’s and Mahindra Swaraj have driven a 13-fold increase in women’s participation over a decade, demonstrating that systemic change can scale when policy, data and employer incentives align.

However, realistic estimates suggest India could take two decades or more to catch up with G20 peers on female workforce participation if current trends persist.

Budget 2026’s real test will be whether it lays the foundations for sustained progress, supporting women not just to enter the workforce, but to stay, grow and lead.

From the government’s perspective

From the government’s standpoint, the Union Budget is not designed to be a standalone policy instrument for fixing corporate gender gaps. Gender researcher Sona Mitra points out that the Budget is fundamentally a fiscal statement.

“The Union Budget is essentially a policy statement of revenue and expenditure. One cannot expect a policy announcement in the budget,” she says, tempering expectations of direct corporate governance reforms in Budget 2026.

What the government does emphasise, however, is mainstreaming gender considerations across spending. The Gender Budget, introduced in 2005–06, is meant to enable a gender-sensitive analysis of government programmes by disaggregating allocations based on their impact on women and men.

It is structured in three parts:

• Part A – schemes with 100% provision for women
• Part B – schemes with 30-99% allocations for women
• Part C – introduced in the July 2024 Budget, covers schemes with up to 30% allocations.

While Mitra acknowledges that the Gender Budget for FY26 proves allocations have risen sharply, crossing the ₹3 lakh crore mark for the first time, it also flags a key gap. “The government needs to provide a clearer rationale for how the money is being utilised towards gender equity under a scheme,” she argues, underscoring the need for better auditing and outcome tracking.

The broader message from policymakers and researchers is that Budgets can enable, but not engineer, change on their own. Structural shifts in women’s participation, especially in corporate leadership, will require coordination beyond fiscal tools.

What can private stakeholders do to help?

Public policy can set the direction, but private capital and corporate leadership hold the real levers of change – from career design to leadership backing. While women enter the workforce, far fewer reach positions of influence, a gap that companies and investors are uniquely placed to close.

For boards and promoters, the challenge is not just representation but authority. As Kaur, a venture capitalist, puts it, “I see the role of women in boardrooms in three stages. First is inclusion with a seat at the table. The second is participation. And the third is power and influence.” She adds that presence alone is not enough, “You could be in the seat but be completely quiet. You could have a voice, but your voice may not matter. And then comes power.”

Investors, especially in private markets, influence these outcomes early, but Kaur acknowledges the constraints. “Most VC firms have a very high pressure to deliver certain returns. So the first priority becomes how to optimise for value creation. Inclusion or impact is, at best, priority number two,” she says. A largely hands-off investment approach, she argues, often limits deeper intervention on leadership composition.

Kaur points to mentorship as one practical lever. “When I mentor women founders, I see that they are building in a very different way. The culture is very interesting. I see those nuances,” she says, underscoring how leadership diversity can shape organisations early.

For India Inc, the takeaway is clear: Hiring more women is only the starting point. The real test lies in retaining them through mid-career stages, giving them decision-making authority, and backing them into leadership roles.

As the country looks ahead to Budget 2026, closing the gender gap will require markets, capital and employers to move in step with public policy, as Udaiti’s Pooja Sharma Goyal notes, “Women’s participation is not peripheral to Viksit Bharat – it is fundamental to it.”