India has lost half of its manufacturing jobs in the last five years.

Manufacturing jobs in 2020-21 was approximately half of what it was five years earlier, according to an estimate by the Centre for Economic Data and Analysis (CEDA) focused on the CMIE monthly time-series of employment by sector.

Although the employment situation in the country has deteriorated in recent months as a result of the pandemic, manufacturing, which has ostensibly earned a lot of policy attention, has been losing ground to other sectors, most notably agriculture, as a job creator over the past few years.

Manufacturing jobs in 2020-21 was approximately half of what it was five years earlier, according to an estimate by the Centre for Economic Data and Analysis (CEDA) focused on the CMIE monthly time-series of employment by sector.

Due to the pandemic, the downturn was especially pronounced in 2020-21; the sector employed 32 percent fewer workers in 2020-21 than in 2019-20. Real estate and construction also saw a significant drop in its job share in 2020-21 (see chart) and a secular decrease in the five years leading up to 2020-21.

Although manufacturing employment has declined over time in all sub-sectors excluding chemical industries, all sub-sectors have experienced a longer-term decline. Manufacturing jobs fell by 46% from 51 million in 2016-17 to 27.3 million in 2020-21, showing the seriousness of the employment crisis triggered by the pandemic. Manufacturing employs 17% of the country’s GDP.

Similarly, the real estate and construction industry, which employed 69 million people in 2016-17, will employ just 53.7 million people in 2020-21, a quarter less than in 2016-17. Although the pandemic hastened the downturn, the industry had already been hit hard by product shortages, distribution delays, and developer defaults. Owing to a boom, the real estate industry saw a dramatic rise in job growth from 2004 to 2011.

Agriculture now employs more people than it did five years ago, according to the CEDA-CMIE study, which covered agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services, sectors that account for 99 percent of total employment in the country.

Agriculture, which employed 145.6 million people in 2016-17, will employ 151.8 million people in 2020-21, increasing its job share from 36% to 40% during that period. Agriculture has seen a slight change away from manufacturing, non-financial services, mining, and real estate in the last two years, with year-on-year growth rates of 1.7 percent in 2019-20 and 4.1 percent in 2020-21, reflecting a marginal shift away from the conventional resort for livelihood.

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