India's gender budget allocation for FY26 has jumped 37% year-on-year to ₹4.49 lakh crore, spanning 49 ministries and departments, as policymakers intensify focus on women's empowerment. However, labour market data reveals a persistent gap between fiscal commitment and workforce outcomes, raising questions about the effectiveness of budget allocations alone in addressing gender inclusion challenges.

Workforce Participation Data Reveals Structural Challenges

Despite increased government focus, labour market statistics highlight ongoing disparities in women's workforce participation. The data shows that India's total workforce expanded by 6% in FY25, while women's employment grew by a modest 7% - a gap considered too narrow to drive meaningful scale in participation rates.

More than half (52%) of NSE-listed companies continue to employ fewer than 10% women, even as India positions itself as the world's fastest-growing large economy. This corporate representation data underscores the challenge of translating policy initiatives into workplace outcomes.

Sectoral Progress Shows Mixed Results

Sector-wise analysis reveals varying levels of progress in women's workforce participation across different industries. The Udaiti CGG Dashboard data for FY24-25 shows notable improvements in specific sectors while others remain stagnant.

The healthcare and consumer services sectors demonstrate positive momentum, while banking and financial services show limited progress in women's representation.

Economic Impact and Growth Implications

The World Bank's Managing Director of Operations, Anna Bjerde, has indicated that raising female labour force participation to 50% could add 1 percentage point to India's GDP growth. This projection highlights the economic significance of addressing gender workforce gaps as India works towards high-income status by 2047.

At the current pace, India faces challenges in meeting its ambition of raising female labour force participation to 70% by 2047, a target considered critical for inclusive and sustained growth. The Ministry of Labour and Employment Secretary, Sumita Dawra, has emphasized that higher women's participation remains central to long-term development objectives.

Gender Budget Structure and Implementation

The Gender Budget, introduced in 2005-06, enables gender-sensitive analysis of government programmes through disaggregated allocations. The budget structure includes three distinct categories:

• Part A: Schemes with 100% provision for women
• Part B: Schemes with 30-99% allocations for women
• Part C: Introduced in July 2024 Budget, covering schemes with up to 30% allocations

While allocations have crossed the ₹3.00 lakh crore mark for the first time, reaching ₹4.49 lakh crore for FY26, experts emphasize the need for clearer rationale on fund utilization towards gender equity and better outcome tracking mechanisms.

Private Sector Role and Leadership Gaps

Corporate leadership data reveals significant representation challenges at senior levels. The Hurun India Uth Series, recognizing accomplished entrepreneurs under 40, features just 36 women compared to more than 400 men. This disparity reflects how workforce participation gaps translate into leadership and wealth disparities.

Women's representation in corporate boardrooms remains below 20% in India, compared to 33-40% in European countries. Venture capital firm Epiq Capital notes that European progress resulted from regulatory intervention rather than organic change, suggesting the need for sustained public and regulatory support.

Implementation Success Stories

District-level diagnostics in Uttar Pradesh and shop-floor reforms in companies such as Dr Reddy's and Mahindra Swaraj have demonstrated measurable progress. These interventions have driven a 13-fold increase in women's participation over a decade, showing that systemic change can scale when policy, data, and employer incentives align effectively.

India's Global Capability Centre (GCC) ecosystem stands at a critical juncture as the country prepares for Budget 2026. With nearly 2,000 GCCs employing around two million professionals, India has established itself as the world's largest GCC hub. The sector has undergone significant transformation over the past decade, evolving from basic business process outsourcing operations focused on cost arbitrage to sophisticated strategic hubs handling knowledge services, digital engineering, analytics, research and development, shared services, and global decision-making functions.

Sector Evolution and Current Scale

The maturity of India's GCC landscape is increasingly evident through the growing prominence of Indian senior leaders who are securing global and regional leadership roles within multinational corporations. Recent years have witnessed accelerated growth in new GCC launches and expansion of existing centres, alongside exponential growth in allied ecosystems such as data centres.

Challenges and Competitive Pressures

Despite positive developments, GCC leaders face mounting challenges that could impact India's competitive position. Geopolitical tensions and rising anti-outsourcing sentiment have increased scrutiny of cross-border service delivery models. Restrictive visa regimes have complicated talent deployment strategies, while recent tariff-related developments have added uncertainty, prompting India to recalibrate its trade approach.

International competition has intensified significantly, with countries implementing aggressive strategies to attract GCC investments. The Philippines extended its Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, offering income-tax holidays and enhanced deductions for foreign investors establishing IT-BPM and R&D centres in special economic zones. Malaysia launched its Digital Investment Office (DIO), streamlining approvals and providing targeted incentives for digital infrastructure, including data centres and AI laboratories.

Industry Expectations for Budget 2026

The GCC sector anticipates several critical policy reforms in Budget 2026 to maintain India's competitive advantage and support continued growth.

Tax Policy and Regulatory Reforms

Industry leaders expect clear and stable tax policies coupled with robust dispute-resolution mechanisms. Key anticipated proposals include:

Specific Policy Priorities

The rationalisation of permanent establishment norms tops the industry agenda due to its interplay with transfer pricing and attribution risk of global profits to Indian activities. With visa restrictions affecting employee mobility, many headquarters personnel remain in India, creating potential service permanent establishment risks for parent companies.

The sector seeks relief for employees stranded in India who face additional tax burdens from dual taxation in both India and their home employment countries. Industry also expects policy changes to facilitate Indian leaders taking on global and regional roles without exposing GCC headquarters to additional transfer pricing mark-ups.

Expansion of safe harbour provisions for transfer pricing represents another priority, with expectations for sector-specific regimes featuring higher transaction thresholds and industry-based margins, particularly for capital-intensive areas such as data centres and digital engineering.

Tier-3 Cities Development Strategy

Budget 2026 could catalyse GCC expansion into tier-3 cities through targeted infrastructure development and policy frameworks. Proposed measures include industry-academia partnerships for advanced technical and multilingual training, incentives for regional hiring, and a national digital apprenticeship scheme emphasising innovation and practical skills development.

These lower-cost cities could emerge as competitive alternatives to emerging global GCC destinations while addressing congestion issues in tier-1 metropolitan areas. The strategy aims to create inclusive growth opportunities and expand India's GCC footprint beyond traditional urban centres.