Key Details
A paper in the National Statistics Office’s 121st issue of Sarvekshana journal uses Annual Survey of Industries (ASI) 2022–23 data to compare factories by workforce size and by selected workplace characteristics.
Scale: Factories with more than 200 workers made up 10.4% of the estimated 2.06 lakh factories, but employed 63.1% of workers and generated 72.4% of factory gross value added (GVA).
Research: 2.7% of factories had a research and development (R&D) unit. Within each size group, those with an R&D unit recorded roughly two to three times more GVA per worker than those without one.
Training: 6.7% reported formal worker training. Within size groups, training-providing factories recorded 1.5 to 2.4 times more GVA per worker. The survey defines formal training as structured vocational or technical training of at least 200 hours.
Other differences: 4.5% of factories reported fixed assets for pollution-control equipment. Women made up 10.9% of workers across the factories studied.
Employment and Value Addition Are Concentrated in Larger Factories
The study groups factories by whether they employ up to 10, 11–50, 51–200 or more than 200 workers. The largest group is small in number of factories, but dominant in employment and value added: it accounts for about 92 lakh of the estimated 1.46 crore workers and ₹15.90 lakh crore of the ₹21.97 lakh crore in GVA.
That concentration matters when interpreting manufacturing totals. A relatively small group of factories can account for much of the sector’s measured output and employment, while smaller factories remain far more numerous.
Research and Training Are Uncommon but Associated with Higher GVA
R&D units and formal training are more common in larger factories. 12.4% of factories with over 200 workers had an R&D unit, compared with 0.6% of those with up to 10 workers. The corresponding figures for formal training were 20.1% and 2.5%.
Factories reporting either feature also had higher GVA per worker within each size group. This is a useful comparison, but not a causal test. Differences in industry, capital, technology or management may also contribute to the observed gap. The study therefore supports closer examination of how smaller factories acquire technical and workforce capabilities; it does not show that establishing an R&D unit or offering training would, by itself, reproduce the measured gains.
Size Differences Extend Beyond Production
Pollution-control assets and women’s participation also vary with factory size. 12.2% of factories with over 200 workers reported pollution-control equipment as a fixed asset, against 2.3% of those with up to 10 workers. Women accounted for 11.5% of workers in the largest group and 8.5% in the smallest. These are descriptions of the factories surveyed, not measures of whether pollution is adequately controlled or employment is equitable.
What Is Gross Value Added?
Gross value added (GVA) is the value a factory creates after subtracting the goods and services used in production. Comparing GVA per worker helps show differences in value addition relative to workforce size, though it does not isolate workers’ effort from machinery, technology or other inputs.
Policy Relevance
The concentration of output in larger factories makes factory growth and links between small and large producers relevant to manufacturing policy. The low incidence of R&D and formal training points to capabilities that warrant attention across factory sizes. Future ASI analysis could test whether changes in those capabilities are followed by stronger performance, rather than treating the associations in one survey year as proven effects.
Follow the Full Paper Here: Sarvekshana, 121st Issue, “Impact of In-Kind Social Transfer on Level of Living of Indian Households”