A budget which forefronts ‘care’ is needed

A robust, well-funded care economy is not just an investment in the present but a foundation for a more prosperous and equitable future.

The care sector is emerging as a critical area for employment generation, particularly in an era of automation and artificial intelligence (AI). While technological advancements are transforming global labour markets, they also threaten traditional jobs. According to the World Economic Forum’s (WEF) Future of Jobs Report 2025, nearly half of employers globally plan to reorient their businesses to adopt AI. Two-thirds are seeking talent skilled in AI, while 40 percent anticipate workforce reductions in roles vulnerable to automation.

In contrast, the care economy offers immense potential, especially for women’s employment, as it is less susceptible to automation and driven by rising demand due to demographic changes. The care economy encompasses a wide range of services, including childcare, elderly care, long-term care for dependent adults, domestic work, and early childhood education. Investing in these services could generate millions of jobs while addressing critical societal needs. The International Labour Organization (ILO) estimates that increased investment in India’s care sector could create 11 million jobs by 2030, 32.5 percent of which would be filled by women.

Why the Care Economy matters for India

India faces a dual challenge: low female labour force participation and significant demographic shifts. Currently, the labour force participation rate (LFPR) for Indian women is just 41.7 percent, compared to 77.2 percent for men. Globally, women’s LFPR averages 50 percent, while men’s stands at 80 percent. Addressing this gender gap could yield tremendous economic benefits. A McKinsey Global Institute report projects that achieving gender parity in employment could boost India’s GDP by 60 percent.

Simultaneously, India is undergoing a demographic transition. While the proportion of children in the population remains high at 24 percent, it is declining. Conversely, the elderly population (aged 60 and above) is expected to exceed 20 percent—approximately 347 million people—by 2050. This shift underscores the growing demand for care services, particularly in both childcare and elderly care, positioning these areas as key drivers of future employment.

According to the Time Use Survey (2019), women in India spend an average of seven hours daily on unpaid domestic and caregiving tasks, compared to just 30 minutes for men. Over 92 percent of women engage in unpaid domestic work, compared to 50 percent of men. This unequal burden of unpaid work severely restricts women’s opportunities for paid employment, education, and personal growth, perpetuating gender disparities in the workforce.

Unpaid care work represents not only a social inequity but also a substantial economic cost. Estimates suggest that its economic value in India is equivalent to 15-17 percent of the country’s GDP. The State Bank of India’s EcoWrap series (2023) calculated the monetary equivalent of women’s unpaid labour at Rs 22.7 trillion ($270 billion).

Unlocking women’s potential and policy priorities for Budget 2025

For India to achieve gender parity in its workforce, systemic change is essential. The care economy is not merely a social necessity but also a strategic economic opportunity. For a labour-abundant country like India, this sector is an ideal avenue for job creation, especially for women. Investments in care infrastructure and services can unlock women’s untapped potential, directly increasing workforce participation and indirectly boosting economic growth by enabling women to pursue paid employment.

The Union Budget 2024-25 introduced measures such as working women’s hostels and creches. However, these initiatives primarily address paid care work only, leaving a significant gap in policies targeting unpaid care work—a major barrier to women’s workforce participation. To capitalise on the opportunities presented by the care economy, the government must adopt a more comprehensive approach in the 2025 Budget. Key policy interventions include:

* Investing in Infrastructure: Develop accessible, high-quality childcare and eldercare facilities, especially in underserved areas.

* Skill Development for Care Workers: Launch programs for skilling, reskilling, and upskilling care workers to meet domestic and global demand, boosting both employment and remittances.

* Public-Private Partnerships (PPPs): Encourage private sector involvement and corporate social responsibility (CSR) initiatives to expand care services.

* Recognising Unpaid Care Work: Implement tax deductions for caregiving expenses and offer incentives to promote equitable sharing of care responsibilities within households.

* Flexible Work Arrangements: Introduce policies that support remote work and flexible hours, enabling women to balance caregiving and employment.

In particular, the “Triple R” framework—Recognise, Reduce, and Redistribute—provides a roadmap for addressing unpaid care work. Recognition involves acknowledging the economic and social value of care work. Reduction entails investing in affordable, reliable care facilities to lighten the burden on caregivers. Redistribution calls for equitable sharing of caregiving responsibilities within families and external support systems.

A strategic vision for budget 2025

As the government prepares for Budget 2025, placing the care economy at the centre of its agenda is both timely and strategic. Recognising the transformative potential of this sector can pave the way for a more inclusive and equitable workforce while significantly enhancing India’s economic trajectory.

Investing in the care economy addresses critical issues of gender disparity, employment, and economic productivity. It empowers women, supports families, and fosters a more resilient society. By taking decisive action, India can lead by example, demonstrating that economic growth and social equity are not mutually exclusive but mutually reinforcing goals. The time to act is now. A robust, well-funded care economy is not just an investment in the present but a foundation for a more prosperous and equitable future. Budget 2025 must prioritise this sector, ensuring that India reaps the dual benefits of economic growth and social progress.