Industrial production remains heavily concentrated, with establishments employing over 200 workers generating Rs 15.9 lakh crore in gross value added alongside 63% of sector jobs. Conversely, factories with up to 50 employees comprise over 71% of all operational sites yet yield merely 10% of total output. These smaller units struggle with an 85% formal loan-to-GVA ratio, compared to just 39% for their largest peers. Experts recommend establishing cluster-based supply chain linkages and technology programs to foster broader sector-wide growth.
Key points
Disparities in research and development and formal staff training severely limit the comp…: Disparities in research and development and formal staff training severely limit the competitive capacity of smaller industrial units.
Female workforce participation remains critically depressed nationwide, comprising only 1…: Female workforce participation remains critically depressed nationwide, comprising only 11% of all formal manufacturing jobs.
Accelerating broader economic growth depends on facilitating easier credit access and lin…: Accelerating broader economic growth depends on facilitating easier credit access and linking small suppliers directly to larger enterprises.
Sources checked by our analysis pipeline: 1
NEW DELHI: India's manufacturing sector suffers from fragmentation, with a small minority of large establishments driving output, while thousands of medium and small units are burdened with debt and low productivity.
Large factories, employing over 200 workers, account for 10.4% of total operational units, but generate nearly 72% of the country's manufacturing gross value added (GVA) amounting to Rs 15.9 lakh crore and provide 63% of industrial jobs.
In contrast, smaller factories, employing up to 50 workers, make up over 71% of all operational units but contribute 10% to overall manufacturing GVA. Units with up to 10 workers represent 36.3% of operational factories, but yield 2% of output, a recent study in a NSO journal, using data from the Annual Survey of Industries (ASI) 2022-23, showed.
Large factories drive nearly 72% of manufacturing output despite making up just 10.4% of units
The GVA by the manufacturing sector in the country was estimated at around Rs 22 lakh crore in 2022-23. To accelerate industrial growth, policy experts frequently recommend facilitating the scaling up of smaller units through targeted technology upgradation, cluster-based…
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