Nature of manufacturing employment witnessing a shift: MC Analysis

Employment shift from traditional jobs

Equipment manufacturing and machinery repair are fast becoming India’s major employers, with the focus shifting away from traditional industries, according to a Moneycontrol analysis.

While the post-pandemic period witnessed the fastest increase in manufacturing employment over the last decade, the nature of employment also shifted during this period. The government announced the Production Linked Incentive scheme in 2020.

Analysis of RBI data shows that half of the 6 million jobs generated between 2020-21 and 2022-23 came from other manufacturing, which includes repair, and installation industries, metal products, electrical and optical equipment, including smartphones and consumer electronics, transport equipment sectors. Another 44.5 percent were accounted by food products, beverages and textiles and apparel industry. Four sectors accounted for 90 percent of the 6 million jobs added between FY21 and FY23.

This also correlates with industry-level GDP estimates. While manufacturing output from the corporate sector increased 30 percent between 2020-21 and 2022-23, electronic and optical industry jumped 67 percent. Computer and peripheral equipment was up 95 percent during this period.

Repair and machinery installation was up 257 percent.

Traditional or employment-heavy industries still account for 40 percent of job creation, but their share is reducing.

In 2022-23, 40 percent of people employed across manufacturing sector were in food processing and textiles, the ratio was 44 percent a decade ago and 49 percent in 2004-05.

In contrast, the share of transport and electrical equipment in manufacturing jobs went up from 4.4 percent in 2004-05 to 10.1 percent in 2022-23.

Other manufacturing now accounts for 12.7 percent share of employment compared with 8.9 percent in 2004-05.