FY23 wage share in NVA below the pre-pandemic level, shows ASI data

This is despite a fall in the share of profits to NVA and a rise in the share of wages and emoluments in 2022-23 compared to 2021-22

The share of profits as a proportion of total net value added (NVA) in the manufacturing sector in 2022-23 (FY23) remained above the pre-pandemic period of 2019-20 (FY20), while the share of wages and emoluments paid to workers during this period remained below the pre-pandemic level, according to the latest Annual Survey of Industries (ASI) data.

This is despite a fall in the share of profits to NVA and a rise in the share of wages and emoluments in FY23 compared to 2021-22 (FY22).

Experts attribute this divergence between the profits earned by factory owners and shareholders on one hand and workers on the other to the increasing capital-intensive nature of production and a slowdown in employment growth.

The share of profits to NVA has risen to 51.9 per cent in FY23 from 38.7 per cent in FY20, while the share of wages to NVA fell to 15.9 per cent from 18.9 per cent during the same period. The share of emoluments to NVA also fell to 34.1 per cent in FY23 from 40.6 per cent in FY20.

Pronab Sen, the former chief statistician of India, says that the increasing allocation of NVA to profits reflects the production process in the manufacturing sector becoming more capital-intensive and less focused on labour.

“Employment in the manufacturing sector has not grown in line with the rate of growth in NVA, both in terms of permanent employees and contract employees,” he added.

The ASI data has shown that employment generation in the manufacturing sector picked up slightly in FY23, with 1.3 million fresh jobs created in the sector compared to 1.1 million jobs in FY22. During 2020-21, the sector lost nearly 500,000 jobs.

The annual survey by the Ministry of Statistics and Programme Implementation mainly covers factories registered under the Factories Act, 1948, employing 10 or more workers with power or 20 or more workers without power; beedi and cigar manufacturing establishments registered under the Beedi and Cigar Workers Act, 1966; electricity undertakings engaged in the generation, transmission, and distribution of electricity not registered with the Central Electricity Authority; and units with 100 or more employees registered in the Business Register of Establishments prepared and maintained by the state governments.