A study in a National Statistical Office journal, using Annual Survey of Industries 2022-23 data, finds that factories employing more than 200 workers make up 10.4% of India's operational units but generate nearly 72% of manufacturing gross value added, or Rs 15.9 lakh crore of a total Rs 22 lakh crore. Micro units with up to 10 workers represent 36.3% of factories but yield 2% of output, and carry an 85% loan-to-GVA ratio versus 39% for large plants. Only 11% of the manufacturing workforce is female, and just 2.7% of factories run R&D units.
According to timesofindia.indiatimes.com, India’s manufacturing sector is sharply divided by scale: large factories employing more than 200 workers make up just 10.4% of operational units but generate nearly 72% of the country’s manufacturing gross value added, a study published in a National Statistical Office journal has found.
Large units dominate output and jobs
The study, drawing on data from the Annual Survey of Industries (ASI) 2022-23, shows that the manufacturing GVA of these large establishments amounts to Rs 15.9 lakh crore, out of a total sector GVA estimated at around Rs 22 lakh crore for the year. The same large factories also provide 63% of industrial jobs.
At the other end of the scale, factories employing up to 50 workers account for more than 71% of all operational units but contribute only 10% to overall manufacturing GVA. Micro units with up to 10 workers represent 36.3% of operational factories yet yield just 2% of output.
Policy experts cited in the report frequently recommend helping smaller units scale up through targeted technology upgradation, cluster-based supply chain linkages with larger firms and easier access to credit, as ways to accelerate industrial growth.
Smaller factories carry heavier debt loads
The productivity gap coincides with a large debt burden on smaller establishments. Factories with up to 10 workers carry a formal loan-to-GVA ratio of 85%, compared with around 39% for factories employing more than 200 workers.
The study indicates that while small units leverage significant formal credit relative to their size, low capacity utilisation and limited scale prevent them from translating that capital into proportionate output. The result is a manufacturing base where a small minority of large establishments drives the bulk of value creation while thousands of medium and small units remain burdened by debt and low productivity.
Women underrepresented on factory floors
On workforce composition, the ASI study underscores sharper vulnerabilities: merely 11% of the overall manufacturing workforce is female. The share rises marginally from 8.5% in factories employing up to 10 workers to 11.5% in large units with more than 200 workers.
The figures point to a gender gap that persists across every size category of factory, with even the largest establishments recording female participation only slightly above one in ten workers.
R&D and training scale with factory size
A key driver behind the productivity divide is the sharp disparity in shop-floor enablers such as research and development and worker training. Across all operating factories, a mere 2.7% maintain an active R&D unit, while only 6.7% provide formal skill training to workers.
Adoption scales heavily with size, the study finds. Nearly 12% of large units operate R&D facilities and 20% offer formal training, compared with just 0.6% and 2.5% respectively among micro units with up to 10 workers.
The gap in these enablers mirrors the output divide: the units least able to invest in research and skills are also the ones contributing the smallest share of manufacturing value added, while the large factories that dominate output are far more likely to run R&D departments and structured training programmes.
Source: timesofindia.indiatimes.com
Compiled from international media by the SCI.AI editorial team.
