Manufacturing divide: 10% factories account for 72% output

The manufacturing sector in India exhibits a significant divide between large factories and smaller units. Large factories, employing over 200 workers, account for 10.4% of operational units but generate 72% of the country's manufacturing gross value added (GVA), totaling Rs 15.9 lakh crore, and provide 63% of industrial jobs. In contrast, smaller factories, employing up to 50 workers, make up 71% of operational units but contribute only 10% to overall manufacturing GVA.

Units with up to 10 workers represent 36.3% of operational factories but yield only 2% of output. This disparity is further highlighted by the debt burden on smaller establishments, with a formal loan-to-GVA ratio of 85% compared to 39% for larger factories. The study suggests that policy recommendations for accelerating industrial growth should focus on facilitating the scaling up of smaller units through targeted technology upgradation, cluster-based supply chain linkages, and easier credit access.

Brief written by urgent.news from Times of India's own syndicated text. Machine-written — may contain errors; check the original before relying on it.