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Job creation in manufacturing doubles between FY14 and FY23
Industry News- Sep 13,24
While the share of manufacturing in India’s GDP remained steady at 16-17% during FY14-FY23, the government aims to increase it to 25% by the end of the decade.
India’s manufacturing sector saw a significant boost in job creation over the past decade, with employment growing at 1.6% annually between FY14 and FY23, nearly double the 0.7% growth rate recorded between FY05 and FY14, according to an analysis of Reserve Bank of India (RBI) data. This growth comes from the KLEMS database, which tracks employment in both private and public sectors.
Despite concerns raised about India's manufacturing sector, such as those voiced by opposition leader Rahul Gandhi during a visit to the U.S., where he argued that India was facing an "employment problem" due to reliance on Chinese goods, the data tells a different story. Manufacturing employment has grown faster in the last decade, even though overall output slowed during this period, expanding at 5.4% compared to 7.9% in the previous decade.
While the share of manufacturing in India’s GDP remained steady at 16-17% during FY14-FY23, the government aims to increase it to 25% by the end of the decade. Job growth has been uneven across sectors, with industries like wood and non-metallic mineral products experiencing a decline. In contrast, chemical industries saw the fastest employment growth at 4.26% per year, driven by exports.
However, job creation in electrical and optical equipment industries slowed significantly, growing at just 3.9% annually, down from 10.1% in the previous decade. This trend mirrors what has been seen in other developed countries, as automation and technology become more prominent in these sectors.
Despite concerns about labour exploitation, the share of labour income in manufacturing output has increased over the past decade, rising from 31.2% to 32.6%, indicating a higher share of compensation to workers compared to capital.
(moneycontrol)
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