Economy

Manufacturing employment in India dips to half; raises concerns about AtmaNirbhar & Make in India

Since last five year's employment in the manufacturing sector has decreased by nearly half while the same has risen in the agriculture sector according to a report by Ankur Bharadwaj, editor- CEDA-CMIE.

The much-famed & marketed make in India initiative was launched with a target of making the manufacturing sector 25 % of the GDP along with the creation of 10 crore jobs by 2022. But a report by CEDA-CMIE of Ashoka University shows that not only has the government failed to achieve it but made the boisterous roar of the make in India lion into a sheepish meow.

The CEDA-CMIE report takes into consideration 7 important sectors of the Indian economy that make up a total of 99% of employment, on a month-wise series since 2016.

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Source: CEDA-CMIE.

The data in the report shows that there has been a sharp decline in the employment generated by the manufacturing sector over the past 5 years. From employing 51 million Indians in 2016-17, employment in the sector declined by 46% to reach 27.3 million in 2020-21. The make in India program had a target to increase the manufacturing sector’s growth rate to 12-14% per annum. But according to this report, a YoY growth of 1% was seen for 2019-20. The manufacturing sector accounts for almost 17% of the country’s GDP.

All sub-sectors within manufacturing registered a longer-term decline except the chemical industries. The real estate and construction sector along with the mining sector too have seen a sharp decline in employment of 25% & 38% respectively over the past 5 years.

Employment in manufacturing, mining, and real estate, and construction accounted for 30% of all employment in 2016-17, according to the CEDA-CMIE report. By 2020-21, this was down to 21%. 

The agriculture sector employed 145.6 million people in 2016-17. This increased by 4% to reach 151.8 million in 2020-21. While it constituted 36% of all employment in 2016-17, the figure rose to 40% in 2020-21, underlining the sector’s importance for the Indian economy. Employment in agriculture has been on the rise over the last two years with year-on-year (YoY) growth rates of 1.7% in 2019-20 and 4.1% in 2020-21.

 The employment in non-financial services increased by 6.7% while the financial services too saw an increase in employment by 9%. Public administrative services employed 9.8 million people in 2016-17 but it decreased by 19% to 7.9 million in 2020-21.

The data shows that the decrease in employment in the manufacturing sector and the whole employment crisis, in general, predates the pandemic. The government and its supporters cannot call this ” an act of God “, but for sure the pandemic has made it even worse

The whole original report was published by Ankur Bharadwaj, editor-CEDA and can be accessed by clicking here. Data has been taken from the same report for this article.

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