Behind PAN data, a quiet story of women's rise in India's economy
PAN is mandatory for filing tax returns, opening bank accounts, making high-value cash deposits, as well as buying stocks, property and four-wheelers. Increased PAN issue to women indicates the rising role of women in the economy.
Indian women are striding into economic activity more than ever before, if tax department data on permanent account numbers (PAN) is anything to go by.
More women than men secured permanent account numbers (PAN) in the last two fiscal years, signalling their rising participation in areas that require the 10-digit identification number. In FY25, 29.1 million PANs were issued to women, 23% more than the 23.7 million PANs issued to men, income tax department data showed. Similarly, in FY24, 38.1 million PANs were issued to women, 24% more than 30.7 million issued to men.
PAN is mandatory for filing tax returns, opening bank accounts, making high-value cash deposits as well as buying stocks, property and four-wheelers. Welfare funds are usually transferred to beneficiaries' bank accounts, which are linked to a PAN.
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Labour force gains
The trend of rising women PAN holders aligns with the steady rise in women labour force participation rate from 23.3% in FY18 (July to June period) to 41.7% in FY24, driven by more women in rural areas entering the work force.
Better employment opportunities for the marginalized sections have helped in gender-inclusive economic growth, said A.K. Verma, director of the Centre for the Study of Society and Politics, a think-tank based in Kanpur.
“Having a bank account, being able to do financial transactions and being part of the financial system has now become part of women’s consciousness. Also, a lot of welfare schemes are women-centric and the benefits are transferred directly to their bank accounts, which has helped in financial inclusion," said Verma.
Stark contrast
The trend is in stark contrast to FY19 to FY23 period, when only 110 million women were issued PAN against 116.7 million issued to men.
As of 1 November 2024, more than two-thirds of 503 million PM Mudra Yojana accounts, under which loans up to ₹10 lakh are given to non-farm, small and micro enterprises, are held by women, according to a report from Ministry of statistics and programme implementation titled ‘Women & Men in India 2024’ published earlier this month.
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At the end of November 2024, women operated 27.7 million demat accounts, up from 6.6 million at the end of March 2021, as per this report. Also, women hold 301.3 million Jan Dhan or no-frills bank accounts at end of December 2024, more than the 240 million held by men, according to the statistics ministry report which cites finance ministry data.
The consistent rise in the number of women PAN holders reflects a positive trend towards financial inclusion and empowerment of women in India, said Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm. Maheshwari said the steady rise in PAN allotments to women by the income tax department indicates their growing participation in the formal economy.
Behind the rise
“Several factors have contributed to this growth, including improved access to education, rising female workforce participation, self-employment initiatives and targeted government schemes such as Stand-Up India, Pradhan Mantri Mudra Yojana and Udhyam Registration, promoting women's entrepreneurship," said Maheshwari.
The Stand-UP India scheme offers credit facility to women entrepreneurs and to certain other sections of society. Micro, small and medium enterprises register in the Udhyam Portal to access various government schemes and benefits.
The ease of applying for PAN online, combined with Aadhaar-based e-KYC, has also made the process more accessible, particularly in semi-urban and rural areas, added Maheshwari.
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A NITI Aayog dashboard on sustainable development goals attributes a score of 66 out of 100 to India as of FY24 on achieving gender equality, implying that quite a bit of distance is still to be covered by 2030, by which time India and others have to meet the UN goals adopted in 2015. Kerala, Himachal Pradesh, Tamil Nadu, Andhra Pradesh and Goa are the front-runners in this area, according to NITI Aayog.
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