Access to Indian data has improved dramatically over the years, allowing us to do the work that we do, and we're always trying to make the case that looking at Indian public data, particularly from large national surveys, is transformational. However there are a few areas where putting the data together is still hard, and one of the most painful things for us to do has been to extract long-term data on specific industries. But it is crucial to understand some of the most vital big shifts, and the work that our team at Data For India has done on this is allowing us to do some pretty exciting work. I'm going to use one piece of that research today to look at what exactly it is that's driving Indian industry.
First, the context: from my colleague Abhishek Waghmare's work on this, we broadly know that the share of agriculture in both economic output and employment has systematically declined, and that of services, especially when it comes to share in economic output, is what has grown.
Implicit in that is also this insight - the contribution of industry to the domestic product appears to be stagnating, and the share of workers too appears to be plateauing after a steady growth until the 2010s. But what we don't see here is this: what does industry really mean, and could these flat averages be hiding that some sectors within this are growing while others are not? That is precisely what Abhishek finds.
The share of manufacturing - the segment of industry that I would argue is almost equated to industry in public discourse - in economic output is falling while its share in employment has not grown by much. (For a more detailed look at more data sources that we could look at to understand manufacturing employment, and how they compare with each other, read my colleagues Nandlal Mishra and Pramit Bhattacharya's recent research for us here.) The one sector that has grown is construction, which now employs more industrial workers than manufacturing does.
There are many questions for economic policy that this throws up - can and should countries grow without growing manufacturing is a question that Nandlal and Pramit also allude to in their work. But from a data perspective, the missing big shift in manufacturing is to me a striking update to the public conversation.
