India’s manufacturing sector created jobs at a faster clip in the past 10 years than it did in the decade before the financial year 2014-15, a Moneycontrol analysis of the Reserve Bank of India (RBI) data shows.

Employment in the manufacturing sector grew at 1.6 percent annually between FY14 and FY23, almost double the 0.7 percent compounded annual growth rate achieved between FY05 and FY14, as per the KLEMS database.

The KLEMS data, published by the central bank, provides employment estimates of the country’s private and public sectors.

The increase in job additions in the decade is despite output slowing during the NDA years.

Manufacturing output expanded 5.4 percent against 7.9 percent in the previous decade, RBI data shows.

The share of manufacturing in the gross domestic product (GDP) remained unchanged around 16-17 percent over the last decade, with higher contribution coming in from services.

The government plans to increase manufacturing share to 25 percent by the end of the decade.

Changing employment trends

While manufacturing jobs have risen faster, changing technologies and rise in exports shifted employment across industries, KLEMS data shows.

Employment in woods and wood products industry continued to contract in the FY14-FY23 period in keeping with the trend of the previous decade.

Other non-metallic mineral product industries also saw a contraction in employment.

But jobs grew faster in chemical and chemical products, one of India’s top export items. The rate of employment generation in chemical industries at 4.26 percent per annum was the fastest in the manufacturing sector.

Food products and beverages and textiles continued showed a tepid performance even during this decade.

Fewer jobs in electrical, optical industries

India’s is trying to woo electronic manufacturers but the pace of employment in these industries has declined.

Electrical and optical equipment manufacturers added 3.9 percent jobs annually during the FY14 and FY23 period compared with 10.1 percent in the previous decade.

The trend is not unique to India. A comparison with other developed countries for the period also shows a decline in computer equipment and electronics manufacturing.

One reason, experts say, could be the increase in automation and growing reliance on technology in these sectors.

Are workers getting more or less?

One of the concerns often raised about slowing growth in manufacturing is exploitation of labour.

Analysis shows that the labour share of output has increased over the last decade, indicating higher share of compensation to labour than payments to capital.

Between FY14 and FY23, the labour income share grew from 31.2 percent of the total to 32.6 percent.