How does Budget 2025 support women’s economic empowerment?

This article is authored by Mitali Nikore, economist and founder, Nikore Associates, New Delhi.

Women empowerment (Voices of Youth)

Union Budget 2025-26, the first full budget of Prime Minister Narendra Modi’s third term, and our finance minister (FM)’s record eighth consecutive budget was released to much fanfare and jubilation. Departing from her signature straight shooter style, the FM teased the changes in direct taxes, before finally ending her speech with a flourish – declaring zero income taxes for those earning below ₹12 lakhs annually.

Going beyond the headlines of income tax reductions, Budget 2025 is also significant for India’s women – for it marks the 20th anniversary of gender budgeting in India.

We’ve come a long way since India’s first gender budget in 2005-06. In 2025-26, the gender budget is a record ₹4.5 lakh crores – the highest since its inception, and its share in total expenditure stands at almost 9%.

In her speech, the FM highlighted the government’s vision of a Viksit Bharat by 2047 includes “70% women in economic activities.” If recent trends for women’s labour force participation are anything to go by, this target now seems achievable.

After declining for nearly five decades, women’s labour force participation grew from 23% in 2017-18 to nearly 41% in 2023-24, per data from the latest Periodic Labour Force Survey. Yet, given that this rise comes from increasing participation of rural women in agriculture, and growth in women working as unpaid helpers in household enterprises, concerns around quality of employment and gender wage gaps remain.

\So, what did Budget 2025 get right, and how does it support the working women of India?

The first and most obvious – support for middle class households and women taxpayers. Studies show that women are more likely to cut back on personal expenses when their family faces financial challenges. Increasing the exemption limit on income taxes and enhancing disposable incomes benefits women, especially those managing household budgets. Additionally, given prevailing gender wage gaps, a larger proportion of women taxpayers are likely to fall under the exemption limit, and benefit from zero taxation.

Second, supporting women’s entrepreneurship, and rural livelihoods. In her speech, the FM highlighted two new initiatives - a Scheme for first time entrepreneurs offering loans of up to ₹2 crores that targets five lakh women over the next five years; as well as a multisector rural prosperity and resilience programme that prioritises job creation for rural women in 100 agri-districts.

And while these schemes are yet to be notified and budgeted for, gender budget allocations for existing programmes increased across the board - including the National Rural Livelihoods mission (26% increase); Prime Minister Vishwakarma scheme supporting women craft persons (28% increase); and the Self Reliance India fund of support for women entrepreneurs (22% increase).

In addition, ring fenced funding has been provided to women entrepreneurs in the agri-business sector under the Prime Minister Micro Food Processing Enterprises scheme, National Livestock Mission, Dairy development scheme and Pradhan Mantri Matsya Sampada Yojana for fisheries.

And finally – for the first time in two decades, the gender budget ventures into several non-traditional areas. For instance, the ministry of tourism has allocated about 2% of its Swadesh Darsh scheme budget for developing gender inclusive, safe tourism. The ministry of ports, shipping, and inland waterways allocated 4% of its Indian Maritime University budget to support women’s participation; and 1% of the department of biotechnology’s research budget supports women-led research and development. Despite the small allocations, this is a positive shift for it signals an increasing recognition of women’s participation, even in traditionally male-dominated sectors.

And still, on this journey for gender justice in budgets, we have a long way to go. Even today, only 49 ministries and departments out of the total 98, contribute to the gender budget. The gender budget also remains concentrated with just five ministries accounting for 85% and top 10 schemes account for half the allocations – a trend being witnessed since 2005-06.

Achieving the newly established goal of 70% women’s participation in the economy will certainly require enhancing gender mainstreaming efforts, with a focus on three key enablers to unlock women’s economic participation – care economy, digital upskilling, and women’s safety.

The ministry of women and child development (MWCD) has made a commendable start, by prioritising investments to establish 17,000 child care centres in Anganwadis under its flagship Palna Scheme. However, for rapid expansion of childcare facilities across the country, public private partnerships (PPPs) involving community-based organisations present a viable solution. The government may also consider developing a pipeline of care infrastructure projects on PPP mode, for support from the India Infrastructure Project Development Fund.

Only 34% of women in India use mobile internet daily, versus 51% of men as per the Mobile Gender Gap report 2024. Consultations by Nikore Associates show that using digital marketplaces, selling platforms, and even digital payment mechanisms remain challenging for women entrepreneurs. In such a scenario, there is a need for greater focus on bridging gender based digital divides and creating market access through widespread digital literacy and digital upskilling programmes targeted at women- particularly rural women and girls.

And most critically, women face mobility restrictions motivated by safety concerns – thereby limiting their work and education opportunities. The heinous crime against a woman doctor at the RG Kar college in Kolkata in 2024 has highlighted that creating safer public spaces, public transport, and workplaces requires continuous investments. In this regard, the central government may consider expanding the scope and resources under the Nirbhaya Fund, particularly for safe city initiatives.

Garib, yuva, annadata, nari – GYAN- are the four groups that have been consistently highlighted as the government’s priority over the last three budgets. And while a solid start has been made, unleashing the full potential of India’s #NariShakti requires even more innovation in the gender budget.

This article is authored by Mitali Nikore, economist and founder, Nikore Associates, New Delhi.