ANNUAL SURVEY OF INDUSTRIES 2024–25: KEY HIGHLIGHTS AND ANALYSIS

Why In News?

The Ministry of Statistics and Programme Implementation (MoSPI) released the Annual Survey of Industries (ASI) results for FY 2024–25. 

What Are The Key Highlights Of ASI 2024–25?

Growth Indicators (2024–25 vs 2023–24)

• Higher Productivity: Rising NVA per factory points to better per-unit profitability.  

• Investment Boost: Growth in plant and machinery signals higher Gross Fixed Capital Formation and capacity expansion.  

• Formalisation: More operating factories reflect steady formalisation under initiatives such as Make in India. 

Regional Concentration

• Top Five States: Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh together accounted for over 54% of India's manufacturing GVA.  

Employment Drivers

• Labour-Intensive Sectors: Food products, textiles, basic metals, motor vehicles and wearing apparel together contributed over 41% of manufacturing employment. 

A Two-Tier Industrial Structure

Structural Inequality: A small number of large factories produce most of the value, while the large majority of small units contribute little, showing a sharp dualism in Indian industry.  

What Is The Annual Survey Of Industries?

ASI is India's main source of industrial statistics, tracking growth, composition and structure of the organised manufacturing sector.  

• Nodal Agency: Conducted by the National Statistical Office (NSO) under MoSPI. The NSO was formed in 2019 by merging the Central Statistics Office (CSO) and the National Sample Survey Office (NSSO).  

• Legal Basis: Conducted under the Collection of Statistics Act, 2008 (amended in 2017) and its 2024 Rules. 

Coverage

• Factories Act Units: Factories registered under Sections 2(m)(i) and 2(m)(ii) of the Factories Act, 1948, that is, units with 10 or more workers using power, or 20 or more without power.  

• State Variations: Several States, including Maharashtra, Rajasthan, Gujarat, Uttar Pradesh and Bihar, raised these thresholds to 20+ workers (with power) and 40+ (without power).  

• Bidi And Cigar Units: Establishments under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966.  

• Large Non-Factory Units: Units with 100 or more employees in the Business Register of Establishments (BRE) registered under other laws, such as the Companies Act, 2013 and Societies Registration Act, 1860. For Ladakh and Lakshadweep, the limit is relaxed to 10 or more.  

• Electricity Undertakings: Units engaged in electricity generation, transmission and distribution not registered with the Central Electricity Authority. 

Units Of Enumeration

• Consolidated Returns: Owners with multiple units in the same State and industry group may file a single return. 

• Digital Collection: Data is collected entirely through a web portal, using an establishment-based approach.  

Significance

• Input For National Accounts: ASI feeds into GDP and GVA estimates at national and State levels.  

• Complements Other Data: It works alongside the Index of Industrial Production (IIP), the Periodic Labour Force Survey (PLFS) and the Annual Survey of Unincorporated Sector Enterprises (ASUSE), which covers informal units. 

What Are The Key Challenges?

Industrial Dualism And The "Missing Middle"

• Few Large, Many Tiny: MSMEs make up nearly 79% of factories but produce only about 18% of net value added. 

• Firms Stay Small: Many small firms fail to grow into medium-sized enterprises, creating a "missing middle" that limits productivity and exports. 

Regional Concentration

• Uneven Industrialisation: Five States produce over half of manufacturing GVA, while States such as Bihar, Jharkhand and the North-East lag far behind.  

• Migration Pressure: This imbalance pushes workers to migrate long distances for factory jobs.  

Slow Labour Productivity Growth

• Weak Productivity Gains: GVA per person grew by only 2.25%, far slower than total GVA, suggesting growth came more from adding workers than from efficiency.  

• Capital Concentration: Large firms hold about 87% of fixed capital, while small firms lack machinery and technology. 

Stagnant Share Of Manufacturing In GDP

• Missed Targets: The National Manufacturing Policy (2011) aimed to raise manufacturing to 25% of GDP by 2022, but the share has remained 16%-17%.  

Global Headwinds

• Trade Barriers: Higher tariffs and protectionism in major markets hurt labour-intensive exports.  

• Example: Steep US tariffs on many Indian goods in 2025 hit labour-intensive sectors such as textiles, apparel and gems and jewellery, many of which ASI identifies as major employers.  

• Import Competition: Cheap imports, especially from China, put pressure on domestic producers.  

High Costs And Regulatory Burden

• Logistics Costs: India's logistics costs remain high compared with leading manufacturing nations.  

• Labour Law Transition: The Factories Act, 1948 has been subsumed into the Occupational Safety, Health and Working Conditions Code, 2020, which came into force with the other Labour Codes in 2025. States are still aligning their rules.  

Data Gaps And Lags

• Limited Coverage: ASI excludes the large informal manufacturing sector, which employs crores of workers. 

• Time Lag: ASI results arrive with a delay, limiting their use for timely policy decisions.  

• Varying Thresholds: Different State thresholds under the Factories Act make cross-State comparison harder.  

Way Forward

Help MSMEs Scale Up

• Credit And Equity: Expand credit guarantees under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and equity support through the Self-Reliant India Fund. 

• Cluster Development: Strengthen industrial clusters for shared infrastructure and technology.  

• Example: Germany's Mittelstand, its network of strong medium-sized firms, drives exports through specialisation, skilled workers and long-term finance, offering a model for India's "missing middle". 

Promote Balanced Regional Growth

• Industrial Corridors And Smart Cities: Use the 12 new industrial smart cities approved in 2024 and the National Industrial Corridor Development Programme to spread industry to lagging States. 

• Infrastructure Planning: Use PM Gati Shakti for integrated infrastructure planning. 

Boost Labour-Intensive Manufacturing

• Textile Parks: Expand the PM MITRA mega textile parks to create jobs.  

• Successful Clusters: Replicate thriving local clusters. 

• Example: Tiruppur in Tamil Nadu has grown into a major knitwear export hub, employing lakhs of workers, showing the job potential of labour-intensive clusters.  

Raise Productivity Through Technology And Skills

• Technology Upgradation: Support adoption of automation and Industry 4.0 tools by small firms.  

• Skilling: Align Skill India programmes, such as PMKVY, with industry needs through apprenticeships.  

Integrate Into Global Value Chains

• China Plus One: Attract global firms seeking alternatives to China through PLI schemes and trade agreements.  

• Example: Vietnam became a major electronics exporter by attracting large foreign manufacturers through stable policies, logistics and trade deals, showing what India can achieve.  

• National Manufacturing Mission: Implement the National Manufacturing Mission announced in the Union Budget 2025–26.  

Ease Regulations And Cut Costs

• Smooth Labour Code Rollout: Ensure States notify clear rules under the new Labour Codes.  

• Lower Logistics Costs: Implement the National Logistics Policy (2022) to reduce transport and warehousing costs. 

Modernise Industrial Statistics

• Faster, Wider Data: Reduce release lags and link ASI frames with GST and Udyam registration data.  

• Better Integration: Use MoSPI initiatives such as the eSankhyiki portal and the VISTAR scheme to improve and integrate data on formal and informal manufacturing.  

Conclusion

ASI 2024–25 shows Indian manufacturing growing strongly in output, employment and investment. Yet the data also reveals deep imbalances: a few large firms and five States dominate value added, while millions of small units remain unproductive.   

Source: PIB