According to an analysis by the Centre for Economic Data and Analysis (CEDA) based on the CMIE monthly time-series of employment by industry, manufacturing has been losing out to other sectors and the most to agriculture as job creator over the past few years.
As per the data, manufacturing employment in 2020-21 was nearly half of what it was five years ago. The decline was particularly sharper in 2020-21 on account of the pandemic. As a result, on a year-on-year basis, the sector employed 32% fewer people in 2020-21 over 2019-20.
From employing 51 million people in 2016-17, employment in manufacturing, which accounts for 17% of the nation’s GDP, declined by 46% to reach 27.3 million in 2020-21.
Similarly, the real estate and construction sector, which employed 69 million people in 2016-17, employed just 53.7 million in 2020-21, almost down by a quarter.
As per the CEDA-CMIE study which covered agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services, agriculture now employs more people than five years ago. The agriculture sector that employed 145.6 million people in 2016-17, employed 151.8 million in 2020-21, thus boosting its share in employment from 36% to 40% during the period.
Meanwhile, among the service sectors, in non-financial services, the employment rose over the five-year horizon to 119.7 million to 127.7 million in 2020-21, but there was a sharp y-o-y decline in 2020-21, on account of the pandemic.
In addition, the country’s unemployment rate, which has remained high for a few weeks, soared to a near one-year high of 14.45% in the week ended May 16. The numbers coupled with the declining share of manufacturing jobs give an idea of the extent of the employment crisis caused by the pandemic