Source:Business Standard


The latest results of the Annual Survey of Industries for all registered manufacturing units show the slow recovery of industry from the shock of 2008. Provisional estimates reveal that net value added per factory in 2009-10 grew by 7.6 per cent compared to the low growth of four per cent in 2008-09, a far cry from the double-digit growth in the previous six years since 2003-04. During the 2001-02 downturn, net value added per factory grew by a paltry 2.8 per cent, but jumped back immediately the year after. This time the shock has had more lasting repercussions.


Taking a long-term view, over the eighties, net value added per factory increased by 13.5 per cent annually, the nineties witnessed a slowdown to 8.7 per cent per annum, and growth in net value added per factory bounced back again in the last 10 years at around 14 per cent annually. There has been considerable change in the structure of industry over the past decade. Basic metals, chemicals and chemical products and coke and petrochemical products are the three top industry groups in the aggregate net value added now, but a decade ago, the top three were chemicals and chemical products, food products and beverages and basic metals. Moreover, less than 40 per cent of the aggregate net value added came from industries in rural areas. Now this share is almost 50 per cent, indicating greater direct repercussions of an industrial slowdown on rural India.


There is considerable variation across states as well. Tamil Nadu has the highest number of factories, while Maharashtra has the highest aggregate net value added. When it comes to net value added per factory, this ratio ranges from Rs 3,687 lakh per factory in Sikkim to Rs 17 lakh per factory in Manipur. (Click here for graphs & chart)


The number of factories and the dominant industry groups in the states are key determinants of this indicator. So small states like Sikkim and Goa, with less than 1,000 factories, top the list in terms of net value added per factory. Manipur, Tripura and Andaman and Nicobar Islands with less than 500 factories have the lowest net value added per factory. Maharashtra – which accounts for about 20 per cent of the all-India net value added – registered an impressive net value added per factory of Rs 605 lakh compared to the all-India average of Rs 366 lakh. Gujarat – the second-highest contributor at 13 per cent of the all-India net value added – registered a net value added of Rs 494 lakh per factory. Tamil Nadu, with the third-largest aggregate net value added in India, registered a much lower than average net value added per factory of Rs 220.8 lakh. While Uttarakhand, Jharkhand, Orissa and Chhattisgarh were among states registering a high net value added per factory at levels around two times the all-India average. Bihar, Kerala and Punjab came in the list of states with significantly lower net value added per factory at less than half the all-India average.


Though the structure of industries has changed in recent years, growth of manufacturing units has been grossly uneven across states. Some states have reaped the benefits of the boom period, yet others have a long way to catch up.


Indian States Development Scorecard, a weekly feature by Indicus Analytics, focuses on the progress in India and across the states across various socio-economic parameters.