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India’s Manufacturing Sector & Core Infrastructure
Context:
India’s manufacturing sector saw significant employment growth in the financial year 2022-23 (FY23), with 1.3 million new jobs created, up from 1.1 million in FY22, according to the latest data from the National Statistical Organisation (NSO).
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- This represents a 7.4% rise in total employment in the sector, bringing the number of people employed to 18.5 million, compared to a 7% increase in the previous year.
- This surge in employment coincided with robust growth in the sector’s gross value added (GVA), which increased by 7.3% at current prices to ₹21.97 trillion.
- Total industrial output also saw a notable rise, surging by 21.5% to ₹144.86 trillion during the period under review.
- The top five states for manufacturing employment in FY23 were Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, and Karnataka, which collectively accounted for 55% of the country’s total manufacturing employment.
- Maharashtra led the GVA contributions from the sector, followed by Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh, with these five states contributing 54.5% of India’s total manufacturing GVA.
- Additionally, the average emolument per employee in the manufacturing sector rose by 6.3%, reaching ₹3.46 lakh in FY23, compared to ₹3.25 lakh in FY22.
Challenges in India’s Core Infrastructure Sectors:
- Despite the positive outlook for the manufacturing sector, India’s core infrastructure sectors faced a setback in August 2024.
- For the first time in 42 months, the output of the country’s eight key infrastructure sectors contracted by 1.8% year-on-year (YoY), according to data from the Department for Promotion of Industry and Internal Trade (DPIIT).
- This decline follows a 6.1% growth in July 2024 and 13.4% in August 2023.
- The contraction in August can be attributed to a high base effect and the impact of the monsoon on industrial activity.
- Of these, only steel and fertilisers saw growth in August, with steel up 4.5% and fertilisers up 3.2%.
The eight core sectors — coal, steel, cement, fertilisers, electricity, natural gas, refinery products, and crude oil — make up 40% of India’s total industrial production, meaning their performance has a significant effect on the overall industrial output index.
