N4S: This article dives deep into the care economy, exploring how unpaid care work -mostly done by women – shapes the economy but remains invisible in GDP calculations. It also evaluates Budget 2025 to see if it addresses these concerns.

UPSC has explored questions on budget provisions, economic structures and social issues, often in an interlinked manner. Questions like “How can care economy be brought into the monetized economy?” (PYQ 2023) test both conceptual clarity and real-world application. Aspirants often falter in such topics by either missing data-driven arguments (like the NSSO Time Use Survey, which shows women spend 3x more time on unpaid work than men) or failing to connect theoretical frameworks to practical solutions (e.g., how investing in care services could create 11 million jobs in India).

This article directly addresses these gaps by not only explaining what the care economy is but also linking it to policy action. It discusses the impact of unpaid care work on GDP (₹22.7 lakh crore contribution, yet unrecognized), evaluates Budget 2025’s indirect wins (like investments in Anganwadis and gig worker welfare), and highlights missed opportunities (lack of formal recognition for unpaid care work). One standout feature of this piece is its structured “Back2Basics” section, which analyses the impact of care economy of Female Labour Force participation to give you a broader picture.

PYQ Anchoring

GS 3: Distinguish between ‘care economy’ and ‘monetized economy’. How can care economy be brought into monetized economy through women empowerment? [2023]
GS 3: One of the intended objectives of Union Budget 2017-18 is to ‘transform, ener gize and clean India’. Analyse the measures proposed in the Budget 2017-18 to achieve the objective. [2017]

Microtheme: Care X Monetized Economy, Current Budget

While hearing a case on insurance compensation for a deceased couple – where the man was a professional and the woman a homemaker – the Supreme Court ruled that the notional income of a homemaker should account not just for her work but also her sacrifices. This wasn’t the first time.

Back in 2021, Kamal Haasan’s Makkal Needhi Maiam (MNM) party brought the conversation into the political mainstream by proposing “due recognition” for unpaid housework in its election manifesto. While paying women for housework within the current system may seem far-fetched, even assigning a notional income helps push the conversation forward—acknowledging housework as work and its place in the economy.

According to NSSO’s Time Use Survey 2019, a staggering 92% of women (aged 15-59) reported doing daily housework, compared to just 29% of men. Women also spend three times more time on domestic chores than men (299 minutes vs. 97 minutes daily).

To make things worse, many working women face the double burden of both professional and domestic responsibilities, often at the cost of their productivity and career growth. The International Labour Organization (ILO) estimates that unpaid care work contributes 9% to the global economy, yet remains largely unmonetized and invisible.

So, where do we go from here? From productivity losses to GDP calculations, the care economy plays a crucial yet overlooked role in shaping national and global economies. Understanding its impact could change the way we view economic growth itself.

Impact of Care Economy on GDP

Parameter	Contribution to GDP & Economy
Unpaid Care Work	– Unpaid care work contributes 15%-17% of GDP (based on 2019 Time Use Survey). – Using minimum wage method: 15% of GDP. – Using weighted average wage method: 17% of GDP.
Total Unpaid Work	– SBI Report (2023) estimates unpaid work contributes ₹22.7 lakh crore (7.5% of GDP).
Impact of Gender Disparities	– Reducing gender gaps in unpaid work could boost India’s GDP by 27%.
Job Creation in Paid Care Sector	– Investing in care services could create 11 million jobs in India. – Globally, care sector growth could generate 475 million jobs by 2030 (ILO data).
Broader Economic Benefits	– Expanding the care economy can increase female labor participation, boosting overall economic growth. – Strengthening care services fosters women-led businesses and entrepreneurship opportunities.

India’s care economy is already a major but undervalued contributor to GDP. Investing in care services and reducing gender inequalities can unlock massive economic growth and job opportunities.

Does Budget 2025 Address the Needs of India’s Care Economy?

Budget 2025 partially addresses the care economy through indirect measures, but it lacks a direct, structured approach to solving core issues like unpaid care work, formalizing care jobs, and large-scale care infrastructure investment.

Budget 2025: Indirect Wins for the Care Economy

Positive Impact	How Budget 2025 Helps	Substantiation (Data/Examples)
Support for Women (Nari Focus)	Women’s empowerment initiatives could benefit those engaged in unpaid care work.	Women in India perform 312 minutes of unpaid care work per day compared to men’s 31 minutes (OECD, 2019). Recognizing this through targeted policies would help bridge this gap.
Childcare & Nutrition (Anganwadis & Poshan 2.0)	Strengthening Saksham Anganwadi & Poshan 2.0 could improve early childhood care and nutrition.	India has 1.37 million Anganwadi centers, but many lack proper infrastructure. More investment is needed to improve accessibility (MoWCD Report, 2022).
Healthcare Expansion (Medical Education & Cancer Day Care Centers)	More doctors, hospitals, and specialized cancer care centers indirectly benefit the care economy.	India has 1 doctor per 1,511 people, below the WHO standard of 1:1,000. Expanding medical education could improve this (NMC, 2023).
Welfare for Gig & Platform Workers (e-Shram Portal & PM-JAY Healthcare)	If care workers (e.g., home nurses, elderly caregivers) are included, they may receive healthcare benefits.	The e-Shram portal has registered 29.8 crore unorganized workers, but formal recognition of care workers remains unclear (MoLE, 2023).
MSME & Entrepreneurship Support	Women-led care businesses (daycares, elderly care services) could benefit from easier credit access.	98% of women entrepreneurs in India operate micro-enterprises, many in caregiving sectors, yet face difficulty securing loans (IFC, 2022).
Skill Development Initiatives	More National Skill Centers could improve the training of care workers.	India needs 2 million additional eldercare workers by 2050 due to a rapidly aging population (UNFPA, 2021).
State-Level Capital Investments	50-year interest-free loans to states could fund care infrastructure if prioritized.	Kerala has state-funded elderly care schemes, but most states lack structured care investments (Economic Review, 2023).

Budget 2025: Missed Opportunities for the Care Economy

Missing Area	What’s Lacking in Budget 2025	Substantiation (Data/Examples)
No Recognition of Unpaid Care Work	The budget does not propose policies to reduce, redistribute, or recognize unpaid care work.	Women’s unpaid labor contributes $10 trillion globally, yet remains unrecognized in GDP calculations (ILO, 2018).
Limited Focus on Care Jobs & Wages	No provisions for minimum wages, job security, or benefits for domestic workers and caregivers.	India has 4 million domestic workers, many of whom lack legal protections and social security (PLFS, 2022).
No Large-Scale Care Infrastructure Investment	No direct funding for daycares, eldercare homes, or disability care centers.	Only 0.3% of India’s GDP is spent on care-related infrastructure, compared to 2% in OECD countries (World Bank, 2022).
No Private Sector Incentives for Care Services	No tax breaks or subsidies for private investments in the care sector.	Japan offers tax incentives for elderly care businesses, leading to 50% growth in eldercare services (Japan Care Economy Report, 2021).
No Data Collection on Care Work	No new initiatives for tracking unpaid and paid care work trends.	India’s Time Use Survey (2019) was the first in 20 years to measure unpaid care work, but needs continuous updates for policy action.

Way Forward

Acknowledging unpaid care work is important, but the real challenge lies in translating recognition into policy and economic reform. Governments and institutions need to explore solutions like care credits, paid family leave, social security benefits, and workforce inclusion policies to ensure women’s labor—both paid and unpaid—is valued. Some of such policies are:

Policy Pillar	Key Focus	Recommendations
1. Leave Policies	Helping people balance work and caregiving	– Support maternity leave costs for small businesses – Introduce parental leave for both parents – Encourage employers to offer care-related leave and flexible work options
2. Subsidies for Care Services	Making care services more affordable	– Provide financial support to Self-Help Groups (SHGs) for childcare and elder care – Offer tax benefits to women-led small businesses in the care sector – Expand government-backed childcare schemes like Palna
3. Investment in Care Infrastructure	Building more care facilities	– Increase funding for childcare centers – Develop government-supported care homes for elderly, disabled, and long-term care – Attract private investment through Public-Private Partnerships (PPPs)
4. Skill Training for Care Workers	Improving the quality of care services	– Create structured training and certification programs – Encourage private institutes to offer care-related training – Partner with international organizations to enhance training quality
5. Quality Assurance & Regulation	Ensuring high standards in care services	– Set up national and state-level monitoring systems – Collect gender-based data on paid and unpaid care work – Establish a Care Sector Skill Council to regulate training and service quality

#BACK2BASICS: IMPACT OF CARE ECONOMY ON FEMALE LABOUR FORCE PARTICIPATION

Comparison of Time Spent on Unpaid Work by Gender in India

There is a stark gender disparity in the time spent on unpaid work in India, with women shouldering a significantly heavier burden than men.

Women Spend More Time on Unpaid Work

Women of working age (15-59 years) spend an average of 5.6 hours daily on unpaid household work, whereas men in the same age group contribute only 30 minutes.
Employed women dedicate 5.8 hours to unpaid tasks, significantly more than employed men, who spend just 2.7 hours.
Unemployed men spend under four hours on unpaid work, still far less than the seven hours spent by women in the same category.

Rural vs. Urban Divide

The gender gap is more pronounced in urban areas, where women spend 9.6 times more time on unpaid care work than men.
In rural areas, the disparity is slightly lower but still substantial, with women spending 8.2 times more than men.

Weekly and Overall Impact

On a weekly basis, women spend 36 hours on unpaid tasks, compared to just 16 hours for men.
93% of working women perform unpaid domestic services for their families, while only 31% of working men do the same.
Women outside the labour force undertake 11.5 times more unpaid work than their male counterparts.

This persistent gender gap not only reinforces traditional gender roles but also limits women’s participation in the formal economy, ultimately impacting India’s economic growth. Addressing this imbalance could significantly improve women’s access to paid employment and contribute to the country’s GDP.

Impact of Unpaid Care Work on Female Labour Force Participation

Key Impact	Explanation	Supporting Data/Examples
Primary Barrier to Workforce Entry	Unpaid care work limits women’s time and energy for formal employment.	ILO Report: Unpaid care work is a major barrier preventing women from entering the labor force.
Declining Female Labour Force Participation Rate (LFPR)	Caregiving responsibilities contribute to low LFPR in India.	PLFS 2022-23: Female LFPR in India rose to 37% (from 23.3% in 2017-18), but mainly in self-employment, not formal jobs.
Underemployment & Labour Underutilization	Women often take up low-paying, part-time jobs due to caregiving duties.	ILO 2018: Women are overrepresented in informal, part-time, and unpaid family work.
“Double Burden” of Work	Employed women also handle most domestic care work, increasing stress and limiting career growth.	ILO 2018: Employed women spend 6x more time on unpaid care than men.
“Time Poverty” Reduces Productivity	Excessive unpaid work restricts women’s ability to engage in paid labor and skill-building.	2019 Time Use Survey: Working-age women spend 7 hours/day on unpaid work.
Reinforces Gender Norms	Cultural expectations push women toward care work, limiting career choices.	ILO 2022: Women’s workforce participation is higher in countries with strong caregiving support systems.
Lack of Support Systems	Insufficient childcare and eldercare services increase women’s unpaid workload.	World Bank 2022: India spends only 0.3% of GDP on care-related infrastructure (OECD average: 2%).

Unpaid care work directly limits women’s workforce participation, pushing them into informal jobs, reducing work hours, and reinforcing gender inequality. Policy interventions like subsidized childcare, parental leave, and flexible work arrangements are essential for boosting female employment.