RBI ESINABARD ESISEBI
In one line
Context:
The share of manufacturing in the GVA hovered at 14% in 2023-24. Historical trends indicate a very slow increase with 18% being the greatest in the early 2000s followed by a continued downward trend after 2010. The stagnancy is clearly validated in the current series of prices and constant price adjusted series, which dropped from 18% in 2020-21 to 17% in 2022-23.
Key Highlights:
Key Insights: Employment generation has frozen in manufacturing, showing only a marginal increase from 10.4% in 1980-81 and 10.6% in 2022-23. This change in the employment pattern is seen in the very high growth of services.
- International Comparison
- Manufacturing share in GDP for India is the lowest compared to other regional countries such as Bangladesh and Sri Lanka, and even lower than Pakistan. This manufacturing activity pales in comparison with that of countries located in Southeast Asia and also China, where,
- Manufacturing comprises 23% and 26% of GDP, respectively.
- Manufacturing share in GDP for India is the lowest compared to other regional countries such as Bangladesh and Sri Lanka, and even lower than Pakistan. This manufacturing activity pales in comparison with that of countries located in Southeast Asia and also China, where,
- Export Problems
- The ratio of manufactured exports to India has reduced from an alarming 18% during 2012 13 to below 7% by 2022 23.
- Manufacturing Problems
- Dependency on imports for manufacturing inputs, including critical pharmaceuticals, has badly affected India’s aspiration of self reliance.
- The change from innovation and process improvement has come to high dependence on government schemes like that of production linked incentive (PLI).
