Factories in the country increased by 1.7 per cent on an annual basis to reach 2.46 thousand rupees in 2019-20, employing a total of 1.3 crore workers, according to the provisional results of the Annual Survey of Industries (ASI) released by the Ministry of Statistics and Program Implementation. The data showed that gross fixed capital formation, an indicator of investment, grew by 20.5 per cent to Rs 4.15 thousand crore in the organized manufacturing sector in 2019-20 against a growth of 10.2 per cent at Rs 3.44 crore in the previous financial year.
This compares with a growth of 1.98 percent in the number of factories to 2.42 thousand lakhs in 2018-19 and a growth of 1.2 percent in the year after the cancellation of trading in 2017-18. These numbers gain significance because they are the results of the normal year 2019-20 before the onset of the COVID-19 pandemic, which affected employment growth.
The detailed breakdown shows that employment in the corporate sector, which includes public and private government and non-governmental companies, increased by 5.5 percent to 97.03 lakh in 2019-20, while that in sole proprietorship decreased by 3.1 percent to 11.36 lakh. ASI results showed that employment in the partnership sector decreased by 11.7 percent to 18.58 thousand in 2019-20 while that for the limited liability partnership grew by 42 percent to 1.22 thousand lakh.
ASI data relates to factories that employ 10 or more workers that use energy and those that employ 20 or more workers that don’t use energy.
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Employment in the previous fiscal year 2018-2019 showed a growth of 5.8% for the corporate sector, and a growth of 2.88% for the partnership sector. It showed a 1 percent drop in sole proprietorship in 2018-2019 after rising in the previous two fiscal years.
In 2019-20, urban areas had 1.43 factories with a fixed capital of Rs 13.64 thousand crore, employing 72.79 thousand workers, while the rural sector had 1.03 factories with a fixed capital of Rs 22.71 thousand employing 57.78 thousand workers, it showed. data.
How is job growth hurt?
These numbers gain significance because they are the results of the normal year 2019-20 before the onset of the COVID-19 pandemic, which affected employment growth.
This is compared to 1.42 lakh factories in the urban sector in 2018-19 with a fixed capital of Rs 12.92 thousand crore employing 70.14 thousand workers and about 1 factories in the rural sector with a fixed capital of Rs.21.74 thousand crore employing 57.83 thousand workers.
Fixed capital represents the depreciated value of the fixed assets owned by the factory as on the closing day of the accounting year and includes land including leased land, buildings, machinery, furniture, fixtures, transportation equipment, water system, roads and other fixed assets like hospitals, schools, etc. used for factory workers.
Among the states, Tamil Nadu showed the highest number of factory workers at 22.09 thousand in 2019-20, followed by Maharashtra with 14.54 thousand workers, and Gujarat with 15.89 thousand workers. This compares with 21.12 factory workers in Tamil Nadu in 2018-19, followed by 14.89 workers in Gujarat and 14.73 workers in Maharashtra.
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Total wages paid to workers grew 6.3% in 2019-20 versus wage growth of 11.9% in the previous fiscal year. Wages for factory workers in the corporate sector rose 7.7% in 2019-20.
Worker figures include all persons who have been employed directly or through any agency whether for wages or not, and who are engaged in any manufacturing process or in the cleaning of any part of machinery or buildings used in the manufacturing process or in any other type of work associated with the manufacturing process. Labor engaged in repair and maintenance, production of fixed assets for private plant use, or used in the generation of electricity, or the production of coal, gas, etc., is also included in the number of workers.
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