Household mfg grows 4x faster than corporates

India's household manufacturing sector is surging ahead, expanding four times quicker than corporate manufacturing between FY23 and FY25, according to new data. Household units now contribute 19.4% of total manufacturing GVA, up from 14.8% in the previous year, while corporate manufacturing dropped to 80.6% from 85.2%. The sector's growth is fueled by smaller businesses and better accounting of informal-sector activity.

Household manufacturing's compound annual growth rate (CAGR) reached 25.2% over the period, compared to 6.7% for corporations. At constant prices, household manufacturing grew at 23.4% CAGR, outpacing the 7.9% growth seen in the corporate sector. Manufacturing as a whole makes up about 15% of India's GVA. The sector's small-scale structure, dominated by micro units and a lack of medium-sized firms, may hinder productivity and job creation.

However, household manufacturing's operating surplus rose by 24.5% annually to ₹4.6 lakh crore in FY25, compared to 7% growth for corporate units. Gaura Sengupta, chief economist at IDFC First Bank, attributes the sector's strong growth to its low base compared to the larger corporate base and better capture of self-employment in the informal sector.