In a promising sign for the Indian economy, the Annual Survey of Industries (ASI) for 2022-23, released by the Ministry of Statistics and Programme Implementation (MoSPI) , revealed a significant increase in employment within the manufacturing sector.
The total number of employees rose by 7.5% to 1.84 crore in 2022-23, compared to 1.72 crore in the previous year. This marks the highest rate of employment growth in manufacturing in the past 12 years.
The ASI data highlighted that the highest employment levels were recorded in factories producing food products, followed by textiles, basic metals, wearing apparel, and motor vehicles.
Additionally, the number of factories increased from 2.49 lakh in 2021-22 to 2.53 lakh in 2022-23, marking a full recovery phase after the disruptions caused by the Covid-19 pandemic.
In contrast, the informal sector witnessed a decline, with employment dropping by approximately 16.45 lakh, or about 1.5%, to 10.96 crore in 2022-23, as indicated by the Annual Survey of Unincorporated Enterprises (ASUSE) 2022-23 released earlier this year.
At a press briefing, NITI Aayog CEO BVR Subrahmanyam emphasized the positive implications of the ASI findings, stating, "What this data is showing is that we have now overcome the Covid shock, and the manufacturing sector is now on the upswing. These figures are coming as a surprise to us also."
The ASI serves as the principal source of industrial statistics for organized manufacturing, focusing on factories employing 10 or more workers using power, or 20 or more workers without power.
Notably, the growth drivers for the manufacturing sector in 2022-23 included industries related to basic metals, coke and refined petroleum products, food products, chemicals, and motor vehicles. Together, these sectors contributed approximately 58% of the total output, demonstrating output growth of 24.5% and Gross Value Added (GVA) growth of 2.6% compared to 2021-22.
The estimated employment in manufacturing for 2022-23 surpassed pre-pandemic levels by over 22.14 lakh, reflecting the sector's resilience and recovery. Average emoluments also saw improvement, with a rise of 6.3% per person in 2022-23 compared to the previous year.
In terms of GVA contributions, Maharashtra led the way in 2022-23, followed by Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh. These top five states accounted for over 54% of the total manufacturing GVA, with Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, and Karnataka also comprising the top states in employment.
Gross Fixed Capital Formation (GFCF), a proxy for capital investment, surged by over 77% to Rs 5.85 lakh crore in 2022-23, up from Rs 3.3 lakh crore in 2021-22. Notably, net fixed capital formation skyrocketed by 781.6% to Rs 2.68 lakh crore. This rebound follows a sharp decline during the pandemic, where GFCF had decreased by 11% in 2021-22.
However, the ASI report also noted a contraction in the addition of stock materials, fuels, and semi-finished goods by over 50%, alongside a 36.1% decrease in the addition of stock of finished goods.
Subrahmanyam mentioned that extrapolating these figures to a projected 7.5% annual GDP growth rate indicates that the share of manufacturing in GDP and employment is likely to increase. He expressed confidence that upcoming GDP data would lead to revised growth forecasts for India, trending upward.
The NITI Aayog CEO also highlighted the positive impact of the Production Linked Incentive (PLI) schemes, stating that growth was more robust in sectors benefiting from these initiatives, including metals, automotive, and food products.
This continued focus on industrial statistics underscores the government's commitment to understanding and bolstering India's economic landscape.
