Despite a rise in the number of people living in agriculture, the share of workers in manufacturing is still lower than it was before the epidemic. Successive policy shocks like demonetisation and lockdown supported a reversal of the structural change that India’s economy was undergoing, where people were moving out of agriculture to manufacturing. As a result, manufacturing’s contribution to gross value added decreased.
Along with interior states like Chhattisgarh (6.6%), Uttarakhand (13.02%), Haryana (18.3%), Telangana (12.8%), Madhya Pradesh (7.9%), and Himachal Pradesh (8.6%), two industrialized states, Gujarat (21.64 percent from 20.84 percent) and Maharashtra (12.66 percent from 11.24 percent), have seen a recovery in the share of workers engaged in manufacturing.
The way workers migrate has clearly changed geographically. They are now only moving to neighboring states or moving inside the same state. Due to the great distances involved, industrial states—especially those in the south—are no longer the first choice for migration. Furthermore, states with a lot of excess labor, like Haryana, Uttar Pradesh, and Himachal Pradesh, have done a better job of holding onto their workforce.