The Annual Survey of Industries (ASI) for 2022-23, released by the Ministry of Statistics and Programme Implementation (MoSPI) Monday, showed that the total number of employees in manufacturing industries increased by 7.5 per cent to 1.84 crore in 2022-23 from 1.72 crore in 2021-22.
This is the highest rate of increase in employment in manufacturing industries in the last 12 years.
The highest employment was recorded in factories producing food products, followed by textiles, basic metals, wearing apparel and motor vehicles, trailers and semi-trailers, the latest ASI data showed.
According to the survey, the total number of factories increased from 2.49 lakh in 2021-22 to 2.53 lakh in 2022-23, which was the first year marking the full recovery phase after the Covid-19 pandemic.
In comparison, the number of workers employed in the informal sector in 2022-23 had dropped by 16.45 lakh or about 1.5 per cent to 10.96 crore compared to 11.13 crore in 2015-16, as per the Annual Survey of Unincorporated Enterprises (ASUSE) 2022-23 released in July this year.
At a press briefing on the ASI data release, NITI Aayog CEO BVR Subrahmanyam said it suggests the impact of the Covid pandemic has been “wiped out”.
What this data is showing is that we have now overcome the Covid shock and the manufacturing sector is now on the upswing and that’s very clear. These figures are coming as a surprise to us also,” he said.
The ASI data is the principal source of industrial statistics and data for organised manufacturing. It relates to factories employing 10 or more workers using power and those employing 20 or more workers without using power. The definition is slightly tweaked for states of Maharashtra, Rajasthan and Goa, wherein data is collected for factories employing 20 or more workers with power and factories having 40 or more workers without power. The survey also covers registered bidi and cigar manufacturing establishments.
The Ministry said the main drivers of the manufacturing growth in 2022-23 were industries related to basic metal, coke & refined petroleum products, food products, chemical and chemical products and motor vehicles.
“These industries, taken together, contributed about 58% of the total output of the sector and showed output growth of 24.5% and GVA growth of 2.6% in comparison to 2021-22,” the Ministry said in a statement.
The estimated number of persons engaged in the manufacturing industries in 2022-23 is higher than the pre-pandemic level of 2018-19 by over 22.14 lakh, the Ministry said. The average emoluments also improved in 2022-23, with average emoluments per person rising by 6.3 per cent in 2022-23 as against the previous year.
In terms of GVA, Maharashtra ranked first in 2022-23 followed by Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh. These top five states together contributed more than 54 per cent of the total manufacturing GVA of the country in 2022-23. In terms of employment also, the top five states were Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh and Karnataka in ASI 2022-23, contributing about 55 per cent of total manufacturing employment in 2022-23.
Workers include all persons employed directly or through any agency and includes both paid and unpaid workers engaged in any manufacturing process or in cleaning any part of the machinery or the manufacturing premises. Employees include all workers and persons receiving wages and holding clerical or supervisory or managerial positions along with those engaged in purchase of raw materials or fixed assets for the factory as well as watch and ward staff.
Gross fixed capital formation, a proxy for capital investment, grew by over 77 per cent to Rs 5.85 lakh crore in 2022-23 from Rs 3.3 lakh crore in 2021-22. Net fixed capital formation, which is derived after removing depreciation, grew by 781.6 per cent to Rs 2.68 lakh crore. Profits in the manufacturing sector grew by 2.7 per cent to Rs 9.76 lakh crore. Fixed capital investments had taken a sharp hit during the pandemic affected years. Gross fixed capital formation had declined by 11 per cent in 2021-22 to Rs 3.30 lakh crore from Rs 4.17 lakh crore in the pre-pandemic year of 2019-20.
In 2022-23, however, the addition in stock of materials, fuels and semi-finished goods contracted by over 50 per cent, while addition in stock of finished goods decreased by 36.1 per cent.
Subrahmanyam added that when these numbers are extrapolated to a 7.5 per cent per annum GDP growth rate, the share of manufacturing in GDP and in employment will also rise. “I am sure in the next two months, when (GDP) data comes out this year, you will see a lot of people revising their growth forecast for India. And they will be on the upper side rather than the lower side,” he said.
The NITI Aayog CEO also noted that growth is better in sectors where there is a Production Linked Incentive (PLI) scheme. “Growth is broad-based. It covers all sectors. The other interesting thing, wherever the growth is strong, you will have a PLI operational like metals, automotive, and food products. All the sectors which have PLI are actually showing a far better growth rate,” he said.