Industrial activity slowed in FY14

Annual Survey of Industries says gross capital formation also saw contraction

Growth in gross value added in nominal terms by industry slowed to 7.2 per cent in 2013-14, after growing at 11.3 per cent in 2012-13, according to the Annual Survey of Industries (ASI) released on Tuesday by the Central Statistics Office.

The ASI data also showed that gross capital formation contracted 5.6 per cent in 2013-14 after growing at 9.2 per cent the previous year, indicating the situation was not rosy in the investment front.

The latest numbers are in sync with the direction given in the gross value added provided in the gross domestic product (GDP) data. Growth in gross value added by industry fell to 9.4 per cent in 2013-14 from 10.9 per cent in the previous year. Similarly, gross capital formation by industry contracted to 0.40 per cent after a growth of 7.32 per cent over this period.

ASI data, however, do not capture unregistered entities and hence there were some differences in the numbers between the GDP data and ASI numbers.

Otherwise, ASI is a comprehensive measure of industrial growth as it covers both registered small and registered medium industries - where all units employing at least 10 workers and using power, or 20 workers and not using power are covered.

The CSO uses the MCA21 database of the corporate affairs ministry and the ASI estimates to arrive at estimates of gross value added.

The ASI data, which comes with a lag of two years, showed that net value added had also slowed down to 6.8 per cent in 2013-14 from 11.4 per cent in 2012-13.

The number of factories rose to 224,574 in 2013-14, up from 222,120 in the previous year, though growth slowed to 1.1 per cent in 2013-14, from 2.1 per cent the previous year.

Wages paid by industry to workers grew at a robust 14.1 per cent, up from 10.9 per cent the previous year. The number of workers rose from 10,051,626 in 2012-13 to 10,427,505 in 2013-14. But profit growth of industry fell to 2.1 per cent in 2013-14, down from 17.2 per cent the year before.