The care economy: India’s invisible growth engine

As India seeks faster growth and a more inclusive development model, the care economy can no longer remain in the shadows. Recognising care as a form of economic infrastructure rather than a private household responsibility is not merely a question of social justice — it is a policy imperative for the country’s future

In all cities and towns in India, an unseen economy operates behind the markets and formal workplaces: the economy of care. Nearly three times more than men’s 97 minutes (NSSO), women spend 299 minutes per day on unpaid care work. This encompasses paid domestic work, elder care, childcare, and unpaid domestic labour within households, which helps millions of households to operate. However, despite contributing 15-17 per cent of India’s GDP, care work is undervalued, unmeasured and poorly supported, with implications for gender equality, labour markets and social policy. Care is infrastructural labour, as it allows for paid work in various sectors. Women spend 16.9 per cent of their day in unpaid domestic work, and 2.6 per cent of their day in caregiving; men spend much less. However, this facilitating function tends not to be reflected in GDP or employment. The outcome is continuing policy neglect: investment that enhances care systems is viewed as a secondary objective of economic policy and not a priority.

The invisible care burden is most pronounced among the ‘sandwich generation’ of working people, particularly married people aged 35-54, who are caring for their children and ageing parents while also working.

The sandwich generation is plagued by higher healthcare and education costs, an ever-increasing need for loans and credit cards, inflation, and the desire for a better life. There will almost certainly be nearly three times the number of people in the ‘sandwich generation’ looking after 1.9 billion elderly family members worldwide by 2050. In India, women undertake most informal care work. Female participation in the labour force in India is 37 per cent, compared with the world average of 47.8 per cent. The growth of a strong care economy has the potential to drive FLPR to global levels, generating up to $770 billion in GDP gains by 2025 (McKinsey). Approximately 4.2 million domestic workers are employed as caregivers, with no training or protection, many of whom are women from marginalised castes and migrant backgrounds. Such labourers do not have labour rights, social security or decent working conditions.

Economic and social costs

The absence of care has tangible impacts. Women’s unpaid caring duties have negative effects on women’s labour force participation, mobility and wages. The sandwich generation is just one example of this crisis: 76 per cent of them worry about becoming financially dependent on their children, while 71 per cent admit to fearing loneliness, even though 55 per cent feel secure about future family support. The added out-of-pocket costs for families who purchase private services or choose not to work are greater when they do not have reliable care options. Thirty-eight per cent of the sandwich generation are confident they will have enough saved to cover more than 10 years of retirement. When employees face multiple care crises, there are indirect costs to employers, including absenteeism and unproductive overtime. At the macro level, when care is not recognised, it limits human capital development and the effective use of the workforce.

Marketising care isn’t the only answer

The market for care in India has been growing in recent years, with the introduction of day-care centres, private elder care homes, and app-based domestic worker platforms. Markets can increase access and generate paid employment, but can, if left unchecked, exacerbate inequality. Platformisation may perpetuate low wages and informal working conditions; privatised care is less of an option for some. In the absence of regulation, the market can cement fragile forms of employment and diversify responsibility for quality and safety.

Western lessons for India

Western countries provide contrasting models that India can learn from and adapt to its context. Along with generous parental leave, parents in Sweden also receive subsidised childcare, which places them among the top countries in the OECD in terms of childcare benefits. Funded training programmes to skill and certify care workers, ensure quality and career progression, have been introduced in Canada. The National Disability Insurance Scheme (NDIS) in Australia sees care as an economic growth driver, with it forming part of national economic planning. In terms of public spending, OECD countries average 0.75 per cent of GDP on childcare, whereas the US invests only 0.33 per cent, which is less than half the average. Iceland is the highest-spending OECD country on childcare, spending five times more than the US. These models suggest that investment in public funding for care brings higher employment and greater workforce participation, and results in decent employment, while funding only by the private sector leads to greater inequalities and reproduces low-wage informal employment.

Policy levers that work

Public investment, regulation and cultural change are needed to recognise and support care. Key policy levers:

• Public provisioning: Increase affordable, high-quality childcare and after-school care and develop community-based eldercare services. Public centres alleviate private costs and create formal jobs.
• Labour protections: Formalise protections and social security for domestic workers and care workers, such as minimum wages, contracts, access to pensions and health insurance.
• Expanding paid family leave and flexible working options: Extend paid parental leave for both parents; create leave options for caregivers; and do not penalise career advancement for flexible working hours or telework.
• Time-use measurement: Periodically gather time-use data, quantify and make unpaid care visible in policy discussions and budget decisions.
• Fiscal prioritisation: Set aside funding lines for care workforce development and care services; consider care as infrastructure.
• Incorporate targeted programmes for middle-aged adults who are juggling care responsibilities for both parents and children.

Examples from Indian states

Community health workers, public anganwadis and school-based programmes have helped to alleviate household burdens. Pune and Bengaluru have introduced public day-care facilities and eldercare helplines as examples of how local governments can open up new space.

Reframing care as investment

The key change required is one of concept: shifting the perspective from care being a personal responsibility or duty to care being public infrastructure and an economic input. Government and employer investment in care services and consideration of care workers leads to higher labour force participation, better child and elder outcomes, and enhanced resilience in times of crisis, such as a pandemic or a climate shock. A strong care economy can help India achieve its goal of increasing FLPR from 37 per cent to 47.8 per cent, thereby generating $770 billion in GDP benefits.

A policy imperative for India

In India, the issue of care policy is imperative given demographic and labour market changes. The population is becoming older, while more educated women and increasing urbanisation will increase demand for organised care.

Without policy intervention, this imbalance in the burden of care will persist, slowing women’s economic progress and maintaining the informal workforce.  Care is the backbone of the economy. It’s not about charity; it’s about good public policy to make it visible and investable.

Care is the backbone of the economy. It’s not about charity; it’s about good public policy to make it visible and investable. The economy of care needs to be on the balance sheet, and policymakers need to understand that the sandwich generation should not be expected to shoulder the burden alone in building a more inclusive and sustainable India

Anuradha PS is Professor at CHRIST (Deemed to be University). She is a senior academician, researcher & columnist, and Divyashree is Professor at Alliance University. She is an academician and researcher with a PhD; Views presented are personal.