Size matters: Decoding Indian manufacturing’s problem of scale
Live MintNew Delhi: The production-linked incentive scheme—one of the ways in which this government was hoping to increase manufacturing in India—is going through a slowdown, with planned expansions to the programme being put on hold. Size does matter As of 2019, the last date for which data was available, Bangladesh’s ALTF sector employed 2.45 million people, with 66% of those working in firms with 300 or more employees. This was especially the case after a Supreme Court ruling in 2001 liberalised rules around contract workers, enabling companies to get around the supposedly ‘rigid’ labour laws, which kick in at the 100-employee mark. As per data from the ASI for only single manufacturing plants, and excluding ‘multi-plants’, the share of employment in manufacturing as a whole has grown since 2011-12, but by just a few percentage points. As an aside, it’s worth pointing out that even the ASI data, adjusted for the issue of multi-plant data, likely overstates the share of workers who work for large firms.