Mfg Efficiency Lowest In 5 Yrs, But More Jobs

Total persons engaged in manufacturing rose from 1.72 cr in 2021-22 to about 1.85 cr in 2022-23

New Delhi: The central government has tried to read a pleasant story in the Annual Survey of Industries (ASI) for 2022-23, but a closer look reveals systemic problems with manufacturing. The output to input ratio, indicating efficiency, was the lowest in the last five years (2018-19 to 2022-23), for which the data are available. On the positive side, there was a rise of 7.5 per cent employees.

The ratio came down to 1.18 in 2022-23 from 1.21 in the previous fiscal, according to the data released by the Ministry of Statistics and Programme Implementation last week. Interestingly, it was the highest, 1.22, during the five-year period mentioned above in 2020-21 - the year worst affected by Covid-19 and the ensuing lockdowns. During 2018-19 and 2019-20, the output to input ratio was 1.2.

The net value added to output ratio, another key indicator of efficiency, also declined from 0.15 in 2021-22 to 0.13 in 2022-23. During 2018-19, 2019-20, and 2020-21, the ratios were 0.14, 0.13, and 0.15, respectively.

The ASI also showed a growing trend of hiring contract workers. There was a continuous rise in the contract workers to total workers ratio in this period - 0.38, 0.38, 0.39, 0.4, and 0.41.

There was, however, an increase in the number of workers per factory in operation from 68 in 2021-22 to 71 in 2022-23. There was also a rise in the total persons engaged per factory in operation from 86 to 90 in this period.

Total persons engaged in manufacturing rose from 1.72 crore in 2021-22 to about 1.85 crore in 2022-23. The ASI defined workers as persons “employed directly or through any agency whether for wages or not and engaged in any manufacturing process or in cleaning any part of the machinery or premises used for manufacturing process or in any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process. Labour engaged in the repair & maintenance, or production of fixed assets for factory’s own use, or employed for generating electricity, or producing coal, gas etc. are included.”

Total persons engaged “include the employees as defined above and all working proprietors and their family members who are actively engaged in the work of the factory even without any pay, and the unpaid members of the co-operative societies who worked in or for the factory in any direct and productive capacity. The number of workers or employees is an average number obtained by dividing mandays worked by the number of days the factory had worked during the reference year.”