Annual Survey of Industries in Indian States

The latest Annual Survey of Industries done by the Central Statistics Office (CSO) said that, Karnataka has overtaken Gujarat to become the second-best state in industrial performance behind Maharashtra.

Maharashtra continued to lead the tables of net value added in 2011-12, according to the Annual Survey of Industries (ASI), while Gujarat slipped to third position for the first time in more than decade, possibly because of the slowdown in exports. Tamil Nadu and Andhra Pradesh are fourth and fifth on the list. Gujarat’s economic performance has been subject to much scrutiny after the BJP named the state’s chief minister Narendra Modi as its Prime Minster candidate and has unleashed a campaign promising to take the Gujarat model of development to the national level.

Gujarat’s industrial performance as measured by the net value added fell by 2.5% between 2009-10 and 2011-12. The state’s contribution to the all-India industry performance fell to 10.48% in 2011-12 from 12.7% in 2010-11 and 15.2% in 2009-10.

While it comes with a lag of two years, ASI is regarded as providing more reliable data compared with the index of industrial production (IIP), as it’s based on the audited numbers of companies. Karnataka improved its position considerably from sixth place in 2010-11 to second in 2011-12, with its net value added growing nearly three folds since 2009-10 to Rs.10,310 crore. The all-India net value added expanded by 18.6%, down from 19% of the previous fiscal.

Pronab Sen, chairman at National Statistical Commission, said that ASI net value added was a fair way of looking at the states’ industrial performance and Gujarat’s falling performance could be partly attributed to the tax incentives in other states. He said, Gujarat has had its problem where its industry has been dominated by pharma and petrochemical firms and due to tax breaks given in Himachal Pradesh and Uttarakhand, Gujarat’s pharma firms are opening units there. Former Planning Commission member YK Alagh said Gujarat benefited in periods of high global growth (2002-2008 in the last decade), but it correspondingly suffers in periods of recession-2009 onwards. Incidentally, India’s overall exports crossed $300 billion for the first time in 2011-12, registering a massive growth of over 17%.

Economic performance is generally measured in value added terms to avoid double counting. In terms of total output, however, Gujarat was second to Maharashtra in 2011-12, while Karnataka was fourth.

ASI covers units registered under the Factories Act with 10 or more workers on any day of the previous year, where manufacturing is carried out using a power source of some kind and 20 and more workers in case where power is not used.

Tamil Nadu had the highest number of factories in 2011-12 at 36,996, followed by Maharashtra, Andhra Pradesh and Gujarat.