11 large states see a drop in people employed in manufacturing sector

Manufacturing employment rose in 11 of 22 states

Half of India’s 22 large states have seen a drop in the share of population employed in the manufacturing sector in urban areas from the previous year, a Moneycontrol analysis of the government data released the previous week shows.

In Q2FY25, the manufacturing or secondary sector accounted for 32.31 percent of the total employment across industries, lower than the 32.41 percent a year earlier.

The decline has come from industrialised states such as Tamil Nadu, Telangana, Karnataka, Gujarat and Rajasthan.

The sharpest drop, however, is in Jharkhand, where the share of the population engaged in the secondary sector was down 5 percentage points from the previous year.

Almost 90 percent of the people in Jharkhand shifted to the services sector. In Tamil Nadu, the shift was from manufacturing and primary activities to a services economy.

In contrast, Andhra Pradesh saw a move towards manufacturing, with the share of people employed in the sector rising from 26.7 percent to 32.2 percent.

Uttar Pradesh and West Bengal witnessed a 2.1 percentage point jump in manufacturing employment.

Gujarat had the highest proportion of urban population employed in manufacturing at 42.7 percent, while Assam and Telangana had the highest share of services sector workers.

Some states saw gains in primary sector employment.

Nearly 40 percent of the states saw a rise in share of population employed in the primary sector activities such as agriculture and fishing in urban areas compared with the previous year.

While Himachal Pradesh, Assam and Jammu and Kashmir were the biggest gainers with the share of people employed in the primary sector rising by at least 1.5 percent during the quarter, Odisha, Kerala, Punjab and West Bengal also witnessed gains in people employed in primary sector work in urban areas.

For most other states, the move was away from agriculture and towards higher remunerative jobs in the manufacturing and services economy.

For instance, in Bihar and Chhattisgarh, the nearly 3 percent decline in jobs in the primary sector was subsumed mainly by the services or the tertiary sector.