Discuss the methodological challenges in estimating manufacturing sector GVA in India, with reference to divergences between National Accounts Statistics and enterprise-level surveys.

Manufacturing Gross Value Added is compiled by the National Statistical Office (NSO) in the National Accounts Statistics (NAS) largely top-down, from corporate accounts and administrative databases [1]. Independent bottom-up estimates built from enterprise surveys have yielded lower figures, making the credibility of the manufacturing GVA number itself a live policy question.

Splicing two structurally different segments

• Manufacturing has an organised factory segment, captured by the Annual Survey of Industries (ASI) — units with 10+ workers with power or 20+ without [2] — and a vast unincorporated segment, captured by the Annual Survey of Unincorporated Sector Enterprises (ASUSE) [3].
• The two use different frames, reference periods and sampling designs, so summing them into one aggregate requires imputations that can diverge from NAS estimates.

Sampling and coverage gaps in the informal sector

• ASUSE 2025 estimated 7.92 crore establishments, growing 7.97% over 2023-24, with manufacturing establishments up 6.48% [3] — a large, mobile universe measured through a sample, vulnerable to non-response and frame obsolescence.
• Firm birth-and-death dynamics and enterprise closures are poorly captured between survey rounds.

Reliance on proxies and indicators in NAS

• NAS extrapolates using corporate filings and indicators such as the Index of Industrial Production; blanket application of organised-sector growth rates to informal units risks overstating GVA when the two segments move in opposite directions, as during demonetisation, GST transition and the pandemic.
• Base-year and methodology revisions — the shift to the new 2022-23 base-year GDP series [4] — periodically recast levels, complicating comparison.

Policy consequences

• An overstated denominator distorts the manufacturing-to-GDP share against the 25% target now set for 2035 under the National Mission on Manufacturing [5], and misdirects PLI and industrial-policy calibration.

Sound statistics are the foundation of credible industrial policy. Faster ASI–ASUSE release cycles, a continuously updated business register linked to GST and EPFO data, and transparent publication of reconciliation methods would narrow these gaps. Strengthening the statistical system is therefore not a technical footnote but a precondition for realising India's manufacturing ambition.