Survey: Manufacturing industries' job growth at 12-year high in FY23

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Last Updated03/10/2024

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.

The Annual Survey of Industries (ASI) for 2022-23, released by the Ministry of Statistics and Programme Implementation (MoSPI), shows a remarkable 7.5% increase in employment in India’s manufacturing sector, with 1.84 crore employees in 2022-23, up from 1.72 crore in 2021-22.
This represents the highest growth in employment in the last 12 years. The sectors leading this surge in employment include food products, textiles, basic metals, wearing apparel, and motor vehicles.

The number of factories rose from 2.49 lakh in 2021-22 to 2.53 lakh in 2022-23.
The manufacturing sector, now past its COVID-19 recovery phase, has experienced the highest employment increase since 2010-11.
According to NITI Aayog CEO BVR Subrahmanyam, these numbers indicate that the COVID shock has been overcome and the manufacturing sector is on the upswing.

Industries such as basic metals, petroleum products, food products, chemicals, and motor vehicles drove 58% of the sector’s total output, with output growth of 24.5% and Gross Value Added (GVA) growth of 2.6% compared to 2021-22.

The top five states contributing to 55% of total manufacturing employment were Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, and Karnataka.
In terms of GVA, Maharashtra ranked first, followed by Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh.

The manufacturing sector saw a significant boost in capital investment:
- Gross fixed capital formation (GFCF), a measure of capital investment, grew by 77% to ₹5.85 lakh crore in 2022-23, compared to ₹3.3 lakh crore in 2021-22.
- Net fixed capital formation saw an unprecedented 781.6% growth, reaching ₹2.68 lakh crore after factoring in depreciation.
- Profits in the sector increased by 2.7%, totaling ₹9.76 lakh crore.
While capital investment showed strong recovery, the addition of stock in materials, fuels, and semi-finished goods contracted by over 50%, and stock additions for finished goods declined by 36.1%.

The report emphasized that sectors with PLI schemes, such as metals, automotive, and food products, are experiencing faster growth, driving broad-based recovery in the manufacturing industry.

With this resurgence, experts like NITI Aayog CEO Subrahmanyam anticipate that India’s GDP growth forecast for 2023-24 may be revised upwards as the impact of the manufacturing sector’s recovery becomes more evident. The service sector survey, set to commence on October 1, 2024, will provide further insight into India’s post-pandemic economic trajectory.