According to additional Annual Survey of Industries (ASI) data released by the Ministry of Statistics and Programme Implementation (MoSPI), every two out of five workers in the formal manufacturing sector were under contract in FY23, indicating an increasing trend of contractualization in the nation's labor force.

The data shows that 253,000 factories in India employed a total of 14.61 million workers in FY23. Of these, 5.95 million employees (40.7%) were under contract, which is a record, compared to just 40.2% during the previous fiscal year. 

Through contractual agreements, industrial establishments employ contract labor for a predetermined task or duration of time.

Regular employees with long-term or permanent employment status and social security benefits are not the same as these workers.

In contrast, just 5.02 million of the 13.05 million workers were engaged through contractors in the pre-Covid year of FY20, making up 38.4% of the workforce.

Additionally, statistics revealed that in FY23, the proportion of women among the remaining directly employed workers in these factories remained unchanged at 18.42%. This is identical to the previous fiscal year.  

According to a state-by-state study of the statistics, in 10 of the 21 major states and union territories (UTs), the proportion of contract workers among all workers in FY23 is higher than the national average.

With the exception of Assam, states like Goa and the Northeastern region have not been taken into account.   

Bihar (68.6%) and Telangana (64.5%) have the most percentages of contract workers, followed by Uttarakhand (57.7%), Odisha (57.3%), and Maharashtra (50.04%).

However, Kerala has the lowest percentage of contract workers in the workforce (23.8%), followed by Karnataka (33.9%), Tamil Nadu (24.5%), Punjab (29.8%), and Himachal Pradesh (32.5%). In Delhi, contract workers make up 12.2% of the workforce.

An organization's "total persons engaged," which includes all directly employed employees, contract employees, supervisory or management employees, and unpaid family members, increased by 7.4% from 17.21 million in FY22 to 18.5 million in FY23. It usually stands for the total number of jobs created by the economy's formal manufacturing sector.

Important information about the shifting dynamics of India's formal manufacturing sector in terms of output, employment, and capital formation can be found in the MoSPI ASI study. Factories registered under the Factories Act of 1948, beedi and cigar production facilities, and energy projects not registered with the Central energy Authority are the main categories it covers.

It also includes businesses with more than 100 workers listed in the state-prepared and maintained Business Register of Establishments (BRE).