“Empowering women is not just a moral imperative; it’s an economic no-brainer. Gender-responsive fiscal policies are a powerful tool for inclusive growth.”- Christine Lagarde, former IMF Managing Director.

The increased involvement of women in economic and political spheres, which had been dominated by men, is considered an important transformation of the twentieth century. There are a number of nations that have made significant progress in reducing gender inequality, but still women continue to face some challenges compared to men in some areas like education, healthcare, employment, and even political representation. These disparities persist globally, and especially it is very severe in most of the developing regions. In contrast, most of the developed nations have largely spanned gender differences in education and health, even though women often remain neglected in political and economic leadership. Enhancements in education and health access for women have been significant in developing countries, but progress in their participation in economic activities, asset ownership, and governance remains confined. In order to enhance equality and aid in the development of women and girls, gender budgeting is a policy strategy that unites gender opinions into government budgeting procedures. It identifies those fiscal decisions and how the government collects and assigns public funds that can substantially influence economic outcomes such as growth, equity, and social development. Effective fiscal management is considered crucial for achieving diverse and sustained economic growth in many developing countries, which is a foundation for meeting the Sustainable Development Goals (SDGs). The fiscal policy influences growth by encouraging financial stability, managing public debt accountably, and fostering savings and investment. It also affects how resources are allocated and the incentives that people face when making decisions about work, education, or investment.

In spite of the widespread impact of fiscal policy, budget decisions often overlook gender-specific needs. This is due to obstacles in gauging how policies impact men and women differently, as well as the disproportionate representation of women in policymaking and public administration. Hence, women’s development targets such as access to quality education, healthcare, and economic opportunities may be forsaken. As per the World Bank report, fiscal policy plays a crucial role in improving economic growth, reducing inequalities, and financing public services. But tax and spending policies commonly exhibit biased effects on men and women, especially in developing countries with massive informal sectors, and rely on social transfers. When the fiscal systems neglect to support women’s full participation in the economy, it not only obstructs gender equality but also confines overall economic progress. A gender-responsive approach to fiscal policy keeps in view the makeup of households and how policies distinctly influence men and women. Data constraints often make it challenging to assess how tax and benefits are allocated within households. But still, household traits such as income levels, caregiving roles, and employment type form women’s labor force engagement, tax burdens, and access to benefits. Elegantly designed social transfers are powerful tools for minimizing poverty, particularly among women. In contrast, voids in coverage and targeting can impair their impact. In Vietnam, for example, women with hefty caregiving duties usually receive minimal aid from direct transfers. Likewise, in El Salvador, pointing out the importance of precisely aimed reinforcement, the households led by women consistently endure being poor in spite of receiving assistance. In Peru, poverty for women can be eradicated with the help of direct cash transfers, but still these improvements can be neutralized by regressive tax systems like VAT, which excessively burden poor households mainly led by women. Thus, expanded and optimized social services might assist in mitigating the effects. Structural inequalities can also be reinforced by tax systems. In Armenia, a flat personal income tax places greater burdens on dual-income households, discouraging women’s employment, especially when caregiving is involved. Meanwhile, in Uruguay, women-headed households pay less tax but often rely on informal income, reducing long-term benefits such as pensions. Low-income households are frequently left out of other policies, such as energy subsidies. In Guinea, many women-led homes lack grid access, limiting their ability to benefit from such programs. Generally, without gender-sensitive design, fiscal policy risks strengthening existing inequalities. Ensuring women have equal access to unbiased and gratifying employment opportunities benefits not only individuals but also the general public. But still, women's participation in the labor force persists around 20 percentage points, which is less than that of men globally; this is mainly due to enduring pay disparities and unfair access to education and opportunities. A recent study states that a well-designed fiscal policy containing investments in education, infrastructure, sanitation, individual-based tax systems, and also paid parental holidays can extend women's economic opportunities and assist in inclusive growth and minimize poverty and inequalities. Countries that adopt these kinds of measures frequently witness more women entering the workforce. Most of the policies are self-supporting in the long term; that is, higher workforce participation augments economic activity, and, in turn, it improves government revenue. Since the 1980s, the gender-responsive fiscal measures have been executed by over 80 countries. Conclusive evidence from high-tech economies like Canada, the Czech Republic, and Sweden shows that converting from joint to individual taxation has notably empowered women to join the workforce. In less developed countries, it aims for investment in girls’ education and enhanced infrastructure, such as access to clean water, lowers unpaid care work, and provides paid employment that is very accessible for women. Fiscal policy that improves gender equality also upgrades productivity across sectors by bringing highly varied skill sets into the workforce.

Tackling tax disincentives that influence secondary earners, particularly women, encourages further female labor force participation. But the consequence of such a policy differs across groups. To illustrate, childcare subsidies and paid leave usually benefit lower-income women to a greater extent, as childcare consumes a greater proportion of their earnings. A combined approach of short-term and long-term, like financial assistance for working women who are poor and investing in their education, can remedy urgent needs as we build long-term economic resilience. Societal values and unfair laws persist as major hurdles. Eliminating these can amplify the effects of fiscal interventions. According to the OECD, such biases reduce women’s education and labor participation significantly, leading to a global income loss equal to 7.5% of GDP. Initiatives like Promundo (a global organization that engages boys and men as allies alongside women and girls in order to prevent violence and advance gender equality). It was established in Brazil in 1997 to focus on reshaping adverse gender norms, uplifting positive masculinity, and assisting men's participation in caregiving and non-confrontational relationships. Which involve men and boys in overhauling gender norms, have seen optimistic responses in thirty-plus countries. The advancement is evident; attaining full gender equality requires persistent pursuit from both policymakers and communities to ensure equal access for all. Fiscal policy impacts more than just national budgets; it molds how households make decisions about employment and caregiving as well as their internal roles. Managing intrinsic structural inequality is essential as nations strive for rapid economic growth. Creating fiscal policy as higher inclusive states acknowledging that taxes and transfers have diverse impacts based on household structure and responsibilities. To form an economy where women can engage completely, fiscal policies need thoughtful development to ruminate and support vast household realities. A just and inclusive tax and transfer system doesn't merely endorse gender equality but also fortifies long-term sustainable economic growth for everyone.