India's Industrial Sector Growth Accelerates, NITI Aayog CEO Targets Over 9 Percent Economic Growth

India's industrial sector is expanding rapidly, positioning the nation to potentially achieve over 9% economic growth, according to NITI Aayog CEO B V R Subrahmanyam. Speaking at a press conference following the release of the Annual Survey of Industries (ASI) by the Ministry of Statistics and Programme Implementation (MoSPI), Subrahmanyam highlighted the manufacturing sector's role in job creation.

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The ASI data reveals a 7.5% increase in employment within manufacturing industries for 2022-23, reaching 1.85 crore from 1.72 crore the previous year. This figure surpasses the pre-pandemic level of 2018-19 by over 22.14 lakh, as noted in a MoSPI statement, which also mentioned an increase in average emoluments compared to the previous year.

Manufacturing Sector Growth and Economic Projections

Subrahmanyam emphasised that India's manufacturing growth is broad-based across various sectors, suggesting that India can target a growth rate exceeding 9%. The Reserve Bank of India has adjusted its GDP growth forecast for the current fiscal year to 7.2%, up from 7%, due to increased private consumption and a resurgence in rural demand.

He also noted that many rating agencies and multilateral organisations are likely to revise India's economic growth projections upwards. "We have wiped out the effect of Covid," stated Subrahmanyam, reflecting on the country's economic recovery.

Key Drivers and State Contributions

The ASI data indicates that Gross Value Added (GVA) increased by 7.3% at current prices in 2022-23 compared to 2021-22. Inputs rose by 24.4%, while outputs grew by 21.5% during this period. The sector experienced growth across most economic parameters, including invested capital, input, output, GVA, employment, and wages, surpassing pre-pandemic levels in absolute terms.

Industries such as basic metals, coke and refined petroleum products, food products, chemicals, and motor vehicles were significant contributors to this growth in 2022-23. These industries accounted for about 58% of total sector output and showed an output increase of 24.5% with a GVA rise of 2.6% compared to 2021-22.

State Rankings and Employment Figures

Maharashtra led in terms of GVA among major states in 2022-23, followed by Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh. Collectively, these states contributed over 54% to India's total manufacturing GVA for the year. In terms of employment, Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, and Karnataka were the top states employing the highest number of individuals in this sector according to ASI 2022-23 data.

Together, these states accounted for approximately 55% of total manufacturing employment in 2022-23. Fixed capital increased to Rs 41,21,794.58 crore from Rs 37,26,354.44 crore in the previous year. Invested capital rose to Rs 61,39,212.55 crore from Rs 55,44,931.75 crore in 2021-22.

The fieldwork for this survey was conducted between November 2023 and June 2024 for ASI 2022-23.