Subscribe to enjoy similar stories. Gross domestic product (GDP) data released last month confirm fears of an imminent economic slowdown in India. While the decline in growth to 5.4% in the second quarter of 2024-25—part of a six-quarter downtrend—may have rung the alarm bells, signs of trouble have been visible for a while.
Among these was weak manufacturing, which grew only 2.2%. While the debate on whether this is cyclical or structural is likely to continue, there is certainly a cause for worry as far as the manufacturing sector is concerned. Detailed estimates from the National Accounts (NA) are available up to 2022-23.
These suggest that the sector has grown at a paltry 2.5% annually during the years from 2017-18 to 2022-23. Since 2018-19, the last full year before the pandemic, growth has been just 1.8% per year. The net result is that the share of manufacturing in national income in 2022-23 is lower than it was in 2017-18.
However, national accounts present only a part of the problem. Fortunately, there is now detailed data available, both for the unorganized and organized segments of the sector. Earlier this year, the National Statistical Office (NSO) released the Annual Survey on Unorganised Sector Enterprises (ASUSE) for 2022-23.
The last report on unorganized manufacturing was for 2015-16. Between 2015-16 and 2022-23, the number of unorganized-sector manufacturing enterprises rose from 17.2 million to just 17.8 million. Almost all of this increase was in the tiniest of enterprises that are characterized as ‘own-account-enterprises,’ which are basically small family businesses.
Read more on livemint.com