OPINION | Why gender budgeting matters for India's economic future

In an era of heightened geopolitical risks, persistent debt challenges, and accelerating climate impacts, fiscal policy must deliver both short-term stability and long-term resilience.

Gender budgeting, the systematic integration of gender perspectives into public resource allocation, has gained traction as a tool that can serve these dual purposes. India’s two decades of experience since institutionalising gender budgeting in 2004 provide a rich case study for emerging markets.

It illustrates how this approach functions within macroeconomic stabilisation frameworks while highlighting the need to evolve it toward deeper structural reforms that explicitly link gender equality, the care economy, and climate action for total factor productivity. 

From a stabilisation vantage point, gender budgeting helps governments navigate fiscal consolidation, high debt levels, and post-pandemic recovery. In federal systems like India’s, with pronounced revenue and expenditure asymmetries, it channels intergovernmental fiscal transfers toward subnational governments without derailing the macroeconomic stabilisation function of the top level of government.

Tools such as fiscal rules and targeted public expenditures allow policymakers to address immediate pressures from supply chain disruptions, global monetary tightening, and climate-related shocks. For women, who often face disproportionate exposure to these risks, such gender budgeting supports consumption stability and limits adverse labour market spillovers. 

What is gender budgeting all about?

Gender budgeting is not just confined to cash transfers to women to cope with livelihood crisis, nor free rides in crucial transport systems to ensure their mobility with dignity. It is a macroeconomic tool to ensure that fiscal policies positively impact women and men with distributive justice and ensure human rights. It has inverse impacts on violence against women, as researched by the University of California, meaning when a State machinery decides to support women, violence against women declines. My analysis with Janet Stotsky of the IMF and Piyush Gandhi of Oxford University showed that intergovernmental fiscal transfers have positive impacts on reducing gender gaps in social infrastructure at subnational government levels.

Time series data across Indian states, analysed through econometric models, have made it possible to trace the impacts of gender budgeting on gender outcomes over time and geography. Allocations for social infrastructure have yielded measurable improvements, even amid tightening budgets. Yet macroeconomic stabilisation, by design, emphasises financial inputs and short-term outputs. The deeper challenge lies in translating these into structural shifts that drive sustainable growth.

Macroeconomic stabilisation-oriented gender budgeting relies primarily on fiscal rules and public expenditure side interventions governed by fiscal discipline. To reach fiscal consolidation thresholds of fiscal deficit, expenditure compression might occur, if revenues are not buoyant, which in turn can be detrimental to the growth recovery process and human capital formation.

India’s experience demonstrates its significance in uncertain times; it has helped maintain macroeconomic stability while maintaining the size of gender budgeting as a percentage of the total budget during periods of global turbulence. However, the tools required for sustained economic growth differ markedly. Structural reforms demand attention to fiscal institutions, incentives, revenue mobilisation, natural resource taxation and cross-cutting issues like care work and climate resilience.

The care economy sits at the heart of this fiscal transition. With demographic transition, states like Kerala with an ageing population on the rise need to strengthen gender budgeting for the elderly, aligning a gender lens in silver budgets designed for the elderly. 

Unpaid and underpaid care responsibilities, including childcare, eldercare, and domestic labour, overwhelmingly fall on women and girls, constraining their participation in paid work and education and limiting aggregate productivity.

Climate change intensifies these burdens. Rising temperatures, extreme weather events, droughts, and floods increase health demands, food insecurity, and migration pressures, forcing additional unpaid labour within households. The research on the intra-household differential impacts of poly crisis is in nascent stages. In agrarian economies, for instance, women farmers bear the brunt of El Niño and erratic monsoons and resource scarcity, amplifying time poverty and economic vulnerability.

Effective structural gender budgeting must therefore intertwine these domains. Investments in public care infrastructure simultaneously advance gender equality and climate adaptation. Such measures free women’s time for education and market work while building household resilience against environmental shocks.

Similarly, climate-focused spending can be designed with gender lenses promoting women’s access to renewable energy technologies, climate-resilient agricultural inputs, and green skills training. These create quality employment opportunities in emerging sectors, reduce indoor air pollution from traditional fuels, which is a major health burden for women, and support a just transition to lower-carbon economies. Prima facie, energy infrastructure appears gender-neutral; however, India’s gender budgeting has shown the plausible impacts of applying a gender lens to energy infrastructure.

India’s experience reveals persistent gaps in this integrated approach. While expenditure budgeting is relatively mature, revenue side integration lags. Tax transfer mechanisms rarely incorporate gender differentiated or climate- care economy analyses. For example, carbon pricing mechanisms or environmental levies could recycle revenues into the care economy and women-led green infrastructure and micro enterprises, but such designs remain partial.

Federal fiscal arrangements compound the issue where states often shoulder heavy responsibilities for social infrastructure and climate adaptation without matching fiscal autonomy. Intergovernmental fiscal transfers need updating to prioritise gender budgeting with care and climate outcomes, such as reducing gender gaps in workforce participation or enhancing adaptive capacity in vulnerable districts.

Challenges in shifting from financial inputs to tangible outcomes persist. Data improvements have enabled better public expenditure tracking, yet comprehensive metrics covering care burdens, climate vulnerability by gender, and long-term growth effects require further refinement. How far Artificial Intelligence (AI) will be able to develop the fiscal and administrative data with transparency and consistency is something we have to wait and watch.

Implementation across diverse states varies, underscoring fiscal and institutional coordination difficulties in a federal setup. The conditional fiscal transfer mechanism is a compelling case to analyse this. 

Recommendations

Emerging economies can draw several lessons to elevate gender budgeting from a macroeconomic stabilisation instrument to a structural transformation tool.

First, mainstream gender, care, and climate considerations across the entire budget cycle. This includes ex-ante gender-climate impact assessments for major public spending and tax proposals, dedicated budget statements, and tagging mechanisms that track expenditure allocations and results.

Second, strengthen the care and climate nexus. Public investment in care systems should be viewed as climate-smart infrastructure. Affordable, accessible care reduces women’s unpaid workload, boosts female labour supply, and enhances social resilience to environmental stresses. Pairing this with green public procurement and skills programmes can channel women into high-potential sectors like clean energy and sustainable agriculture.

Third, address federal spending and revenue asymmetries. Reform tax transfer devolution formulas to incorporate gender equitable climate metrics. 

Conditional fiscal transfers tied to measurable progress such as women’s employment in green jobs or reduced gender disparities in disaster preparedness can align incentives across government levels.

Fourth, leverage data and evaluation. Building on India’s sustained ‘within Ministry of Finance’ gender budgeting efforts, governments should invest in meticulous sex-disaggregated statistics and rigorous impact studies. This evidence base supports adaptive policymaking and fiscal accountability. Fiscal Councils can be a brilliant institutional mechanism to ensure such fiscal marksmanship. 

Fifth, complement budgeting with complementary structural policies including legal reforms for land, labour and capital - for women’s asset ownership and financial inclusion, labour market regulations that recognise care responsibilities, and trade and industrial policies that prioritise gender inclusive green growth.

The economic returns are substantial. Closing gender gaps in participation and opportunity can deliver significant GDP boosts, with additional multipliers from care investments and climate resilience. 

In a world confronting the costs of inaction on climate rising fiscal burdens from disasters, lost productivity, and health expenditures, integrated approaches minimise trade-offs. 

India’s federal system has institutionalised gender budgeting long enough to offer both successes and cautionary lessons. Indeed, there has been err on the side of caution, to maintain fiscal rules and deficit thresholds. It has, however, contributed to macroeconomic stabilisation amid crises, yet unlocking fuller potential requires deliberate integration of care and climate dimensions.

For other emerging markets facing similar pressures, this evolution is critical. Macroeconomic stabilisation buys time, but structural reform, grounded in gender equality and environmental sustainability, secures a sustained economic growth recovery process and prosperity.

Policymakers worldwide realised that gender budgeting is not an add-on or a box-ticking strategy in macro policies, but a central pillar of resilient fiscal strategy and a structural reforms package. By intertwining gender, care, and climate, fiscal policy and budgeting can become instruments of structural transformation. In that way, gender budgeting is a significant PFM tool for fiscal accountability and change.

(The author is a Professor and Chair, NIPFP NET-Website Committee, National Institute of Public Finance and Policy)

The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.