Tamil Nadu leads the country in the number of factories and factory jobs, but Maharashtra and Gujarat generate far more value from their industrial base. The state accounts for 15% of India’s factories, but only about 11% of its manufacturing value added.The Union ministry of statistics and programme implementation (MoSPI) released the annual survey of industries (ASI) results for FY25 last week. Covering registered manufacturing units across India, the survey is based on 86,547 units and provides a snapshot of the country’s organised manufacturing sector. The data suggests that TN’s challenge is not scale, but value creation per worker.Total number of factories covered by the survey rose from 2.60 lakh in ASI 2023-24 to 2.67 lakh in ASI 2024-25, an increase of 2.64%. Tamil Nadu has more factories and factory workers than any other state, but ranks third in terms of GVA.Tamil Nadu has 41,221 factories, accounting for 15.44% of India’s total of 2,66,931. Its factories engage 31.5 lakh people, or 14.99% of the national workforce, including 26.1 lakh workers. This is about 4.9 lakh more workers than Gujarat and 6.1 lakh more than Maharashtra.However, the financial indicators tell a different story. Maharashtra recorded the highest GVA (gross value added) in FY25, followed by Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh.TN’s factories generated 17.96 lakh crore of output and 2.94 lakh crore of gross value added (GVA), accounting for 10.87% and 10.90%, respectively, of the national totals. Gujarat’s GVA is 3.80 lakh crore and Maharashtra’s 4.29 lakh crore. Tamil Nadu employs more people than either state but generates 0.86 lakh crore less GVA than Gujarat and 1.35 lakh crore less than Maharashtra.Tamil Nadu’s GVA per person engaged is about 9.3 lakh, against a national average of 12.8 lakh. Maharashtra generates 15.6 lakh per person, Karnataka 15 lakh and Gujarat 13.9 lakh. Among the six largest industrial states by net value added, only Uttar Pradesh, at 9.8 lakh, is close to Tamil Nadu. Among the 12 states with more than five lakh people engaged in factories, Tamil Nadu ranks 11th on this measure.Karnataka, with less than half Tamil Nadu’s factory workforce, generates about 60% more GVA per person.Tamil Nadu’s factories are also smaller in output terms. The average factory produces about 43.6 crore of output a year, roughly 70% of the national average of 61.9 crore. It employs 76 people on average, slightly below the national average of 79 and well below Maharashtra’s 100.One reason is the amount of capital deployed behind each worker. Tamil Nadu’s factories have fixed capital of 4.36 lakh crore, or 8.53% of the national total. This is the third-highest share, behind Gujarat at 19.87% and Maharashtra at 12.26%, but is only about 55% of Tamil Nadu’s share of factories.Tamil Nadu generates 0.67 of GVA for every 1 of fixed capital, above the national average of 0.53 and close to Maharashtra’s 0.69. The challenge, therefore, is lower capital per worker rather than capital efficiency. Wage data points the same way: factory workers earn 2.09 lakh a year on average, 26% below Maharashtra’s 2.83 lakh and below the national 2.28 lakh. Tamil Nadu ranks ninth among the 12 large states.At the national level, the registered manufacturing sector recorded strong growth in FY25, with industrial output rising 7.81%, total employment 7.19% and emoluments 12.08% over the previous year.
