UPSC Darpan

EconomyGS31 October 2026

Annual Survey of Industries 2024-25: factories add value and workers, but wages lag

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The news

New Delhi. The Ministry of Statistics and Programme Implementation (MoSPI) released the Annual Survey of Industries (ASI) 2024-25 on Wednesday, September 30. Gross value added (GVA, the value of output minus the inputs used up) of registered factories rose 9.6% to ₹26.9 lakh crore, and output 7.8% to ₹165.2 lakh crore, The Economic Times reports. The number of factories rose 2.6% to about 2.7 lakh, the first time in over a decade that the count has grown by more than 2% in two successive years, The Indian Express notes. The two papers count jobs differently: ET reports “persons engaged”, which includes supervisors and managers, at 21 million (up 7.2%); IE reports workers alone at 1.67 crore (up 7.3%). Average wage per worker rose only 5.3%, to ₹2.28 lakh. Uttar Pradesh added 12.8% more factories, the fastest of any State.

The chain in one line: Formal manufacturing stuck near 15% of GVA → PLI schemes and lower corporate tax draw fresh investment → factory count rises more than 2% for two years running → output, capital and jobs all grow → but wage per worker lags value added

Static syllabus linkage

  1. The ASI covers only registered factories, the formal core of manufacturing. The ASI is conducted by the National Statistics Office under MoSPI under the Collection of Statistics Act, 2008, which makes filing returns compulsory. Its frame is factories registered under Sections 2(m)(i) and 2(m)(ii) of the Factories Act, 1948: units with 10 or more workers using power, or 20 or more without power. It feeds the GDP estimates for manufacturing.
  2. Small unregistered units are measured separately, by the ASUSE. The Annual Survey of Unincorporated Sector Enterprises (ASUSE), also by the NSO, covers small unregistered non-farm enterprises, where most manufacturing workers are. So ASI trends describe formal jobs only. Labour share means the part of value added paid out as wages; capital intensity means the capital used per worker.

Why UPSC loves this

  1. GS3 asks whether industrial growth creates jobs. The syllabus lines “effects on industrial growth” and “growth, development and employment” make jobless growth a recurring Mains theme; the ASI is its official evidence.

Prelims nuggets

  • The Annual Survey of Industries is conducted by the National Statistics Office, MoSPI, under the Collection of Statistics Act, 2008.
  • The ASI frame is factories under Sections 2(m)(i) and 2(m)(ii) of the Factories Act, 1948: 10 or more workers with power, or 20 or more without power.
  • Unincorporated non-agricultural enterprises are covered by a separate NSO survey, the Annual Survey of Unincorporated Sector Enterprises (ASUSE).

Analysis

  1. Capital is growing faster than labour, so each new job costs more capital. Invested capital rose 11.1% to ₹75.6 lakh crore while persons engaged rose 7.2%. That is capital deepening: factories are buying machines faster than they hire. It raises productivity, but each formal job needs more investment. Yet 1.4 million added jobs in a year is strong for the formal sector: this is capital-heavy growth, not jobless growth.
  2. Lens — Growth and equity: value is rising faster than the worker’s share of it. GVA rose 9.6% but wage per worker only 5.3%, in nominal terms. Total emoluments rose 12.1% to ₹8 lakh crore, which suggests that supervisors and managers gained more than shop-floor workers. A falling labour share feeds profits and investment but not mass demand. A thoughtful officer would not cap profits; he would push skilling and wage enforcement so productivity gains reach workers.
  3. Factories are slowly moving towards cheaper labour and land. Uttar Pradesh gained almost a full percentage point in its share of factories while Gujarat’s share fell 0.4 point, though five States still hold over half of GVA. Firms follow cheaper wages, land and large labour pools; that is how markets spread industry. But power, roads and land records decide whether a lagging State catches the shift.

Possible Mains question

“India’s formal manufacturing is adding jobs, but workers are not sharing equally in the value they create.” Critically examine in the light of the Annual Survey of Industries 2024-25. (15 marks, 250 words)

Model approach

  1. Directive — Critically examine. Test both halves with data; reach a judgement.
  2. Introduction — ASI 2024-25 shows strong formal growth. Cite GVA up 9.6% and factories up 2.6%, the second year above 2%.
  3. Jobs are real but capital-heavy. Persons engaged up 7.2%, capital up 11.1%; value addition: contrast the ASUSE informal picture.
  4. The worker’s share is lagging. Wage per worker up 5.3% against GVA up 9.6%; draw a bar chart of GVA, capital, emoluments and wage-per-worker growth side by side.
  5. Industry is spreading slowly. UP rising, Gujarat dipping; five States still hold over half of GVA.
  6. Conclusion — pair investment with skills and wage enforcement. Labour-intensive sectors and wage law turn output into shared prosperity.

Administrator's brainstorm

You are the District Magistrate of a fast-industrialising district in Uttar Pradesh. How do you make sure new factories bring decent jobs?

With the labour department, I would check that workers in new units are on the rolls with provident fund and insurance, not hired through unregistered contractors. I would link the district skill centre to the skills these units lack, and clear their power and approval bottlenecks in a monthly single-window review. Registered workers and wages paid, not MoUs signed, would be my measure.