Monthly Economic Review: April 2025

In the Review, we summarise the economic and policy developments in India; monitor global developments of relevance to India; and showcase the pulse of the economy through an analysis of high-frequency indicators and the heat map.

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Counting Handloom Weavers in India

How many handloom weavers are there in India? According to the 4th All India Handloom Census (2019–20), there are 26,73,891 handloom weavers and 8,48,621 allied workers in the country. In other words, there are a total of 35.2 lakh handloom weavers in the country.

Challenges in Estimating the Number of Handloom Weavers in India: A Comparison of Data Sources
The Handloom Census counts total number of weavers and allied weavers’ households by the presence of looms in their household. There were 1.12 workers per household in 2019–20. This makes sense as a ‘handloom’ is defined as “a loom that is used to weave cloth without the use of any electricity. Hand weaving is done on pit looms or frame looms generally located in weavers’ homes. Weaving is primarily the interlacing of two sets of yarn – the warp (length) and the weft (width).”

The Handloom Census also probes household members about the weaving activity undertaken in the previous one year. The total number of handloom worker households went up from 27.8 lakh in 2009–10 to 31.4 lakh in 2019–20. However, the number of workers came down from 43.32 lakh in 2010–11 to 35.2 lakh in 2019–20. The differences in trends between households and workers is quite puzzling.  Bhowmik (2019) points that the increase in handloom households over a decade is counterintuitive to ground reality. One explanation could be the rise in employment intensity i.e. the number of person days rose from 183 days in the 3rd Handloom Census to 208 days in the 4th Handloom Census.

The Periodic Labour Force Survey data (PLFS) is the main source of data on workers in the country. It is a household survey which probes the members of their household about the usual principal activity and subsidiary activity of the household members. The principal activity status of a person is that activity where he/she is engaged for a relatively longer period of the year (183 days and above). On the other hand, the subsidiary status is where the person is engaged for relatively lesser number of days (>30 days and <183 days). One of the limitations of PLFS is that it is unable to capture the number of seasonal migrant workers. Its unit of enumeration is the household, and it includes only those household members who have been continuously staying in the house for at least six months. This could be one of the reasons for some handloom workers getting excluded from PLFS and its undercounting the number of workers.

The PLFS measures gives estimates of workers at the National Industrial Classification (NIC) at 5-digit and the National Classification of Occupations (NCO) at 3-digit level. When one analyses the data from the PLFS, using NIC code at the 4–digit level (NIC code 1312, weaving of textiles) and the NCO code at the 3–digit level (731), one finds that there were only 14.5 lakh weavers in the country. Of this, 97.3 per cent were engaged in the sector as principal workers and 2.7 per cent were engaged as subsidiary workers. Further, one is unable to distinguish between power loom and handloom weavers because the data are at the NCO 3-digit level, which is the same for both types of workers. The NCO 2015–16 assigns the 8–digit code, 7318.5800 to a handloom weaver and 7318.5500 as a power loom weaver. The PLFS indicates that the number of handloom weavers were much smaller than the Handloom Census.

Then one looks at the available Enterprise Survey data. The Annual Survey of Industries (ASI) and the ASUSE (Annual Survey of Unincorporated Sector Enterprises) data are available for both handloom and power loom sub-sectors. The ASI data accounts for organised workforce in textile weaving sector and ASUSE data accounts for unorganised workforce. The ASI and ASUSE Surveys ask firms about their workers, but it is not mapped to occupations. The two databases combined shows that there were 13.8 lakh weavers in the country. Again, these two surveys also indicate a far lower number of handloom weavers than the Handloom Census.

Thus, we see that differences in methodologies are yielding different numbers. So, which is a more reliable measure – the Handloom Census or the PLFS or the ASI/ASUSE?

The differences in number throw challenges for policymakers, as several policies are designed based on these data. Therefore, policymakers are recommended to conduct a pilot using different methodologies to estimate number of workers and assess which methodology yields a more precise number. They may also adopt the usage of NCO 8–digit code.

Disclaimer from the Authors: Views are personal and do not reflect that of NCAER.

NCAER News: April 2025

NCAER News is a monthly digest where you can learn about NCAER’s research outputs, its latest events, and offerings.

Groundwater crisis needs more than just wells

India’s water crisis is no longer a spectre of the future; it is a daily reality. As the summer of 2025 looms, farmers from Punjab to Tamil Nadu brace themselves for parched fields while urban residents grow anxious about taps running dry. Beneath the cracked earth and empty rivers lies an even more alarming threat: the relentless depletion of groundwater—the lifeline of Indian agriculture and rural drinking water supply. While government schemes like the Jal Jeevan Mission (JJM) and Atal Bhujal Yojana (ABY) attempt to address the issue, funding constraints and implementation delays continue to undermine progress.

India’s groundwater situation is precarious. It provides 80% of rural drinking water, 50% of urban drinking water, and nearly 90% of water used in agriculture, yet our extraction rate has soared to unsustainable levels. The average groundwater extraction rate now stands at 60%, with states like Punjab and Rajasthan exceeding 150%, a dramatic rise from 32% in 1995. Despite significant government spending on water programs, groundwater is being consumed faster than it is replenished, turning a renewable resource into a diminishing asset.

Policy Gaps and Financial Hurdles

The Atal Bhujal Yojana (ABY), launched in 2020, was a step in the right direction. It focused on community-led water security plans and incentivised water-saving practices in seven states. However, only 57% of allocated funds have been released, and just 48% have been utilised as of early 2025. While technical targets such as equipment installation have exceeded expectations, only 21% progress has been made on actually reducing the rate of groundwater decline—the scheme’s core objective. The finance exists, but not the fluidity needed for results. The financial bottlenecks are systemic. Centrally sponsored schemes like JJM and ABY follow a co-funding model, requiring states to match funds. Yet, as of February 2025, only 31% of the central share for JJM was released, primarily because states could not mobilise their share or demonstrate fund utilisation. This rigid model penalises less wealthy states and reinforces regional disparities. Moreover, implementation suffers from terrain challenges, cost overruns, and delays in statutory clearances, pushing deadlines further into the future.

Rethinking How We Fund and Govern Water

A fresh financial approach is required—one that matches the complexity and urgency of India’s groundwater crisis. First, the government must expand interest-free loans to states for capital expenditure, a policy already in place but underutilised for water conservation. Currently, a fraction of the Rs 1.5 lakh crore allocated for capital assistance is earmarked for groundwater projects. Earmarking a dedicated groundwater resilience fund within this corpus could ensure states with limited fiscal space are not left behind. Second, we must explore innovative financial instruments. For instance, Green Bonds could be issued specifically for groundwater recharge and rainwater harvesting infrastructure. These bonds can attract private and international climate finance, especially when tied to performance metrics like aquifer recharge levels or reductions in water table decline. Involving corporate CSR funds and impact investors—as seen with partial success in the Clean Ganga Fund—can also bring in alternative capital flows, provided there is better transparency and data sharing.

Third, a pricing rethink is long overdue. Free electricity for agriculture has incentivised water-intensive crops like paddy and sugarcane, worsening groundwater depletion. As recommended by the Central Water Commission, electricity subsidies must be decoupled from water usage and replaced with direct benefit transfers or incentives for adopting water efficient practices. Schemes like Haryana’s “Meri Pani Meri Virasat,” which pays farmers to switch crops, should be expanded with adequate financial backing. Finally, groundwater governance must shift from siloed programs to an integrated institutional framework. The 2016 Mihir Shah Committee recommended merging the Central Water Commission and the Central Ground Water Board into a single National Water Commission with multidisciplinary expertise. Nearly a decade later, this remains unfulfilled. Fragmented data collection, overlapping mandates, and lack of accountability continue to plague outcomes. Establishing a digital National Water Resource Information System with real-time data and open access can help track usage, plan recharge, and build trust with funders.

The Cost of Inaction Is Too High

Sceptics may argue that India cannot afford such expansive financial strategies during economic uncertainty. But the cost of inaction is far greater. Water insecurity affects food production, health, urban development, and climate resilience. The World Bank estimates that water scarcity could cost India up to 6% of its GDP by 2050. Investing in groundwater today is not a luxury—it is economic common sense. Moreover, decentralised groundwater recharge projects create rural employment and reduce climate vulnerability, offering a high return on public investment.

India’s groundwater story does not have to be a tragedy. With smart financing, decentralised planning, and political will, the country can reverse the decline and secure its water future. Just as India led the world in scaling up solar power through bold financial models, it can now become a leader in sustainable water governance. Groundwater may be invisible, but the urgency to act cannot remain hidden.

Mohapatra and Mitra with IIT Jodhpur and NCAER New Delhi, respectively. Views are personal.

The NCAER Business Expectations Survey for India Fourth Quarter 2024–25

The National Council of Applied Economic Research (NCAER), one of India’s premier economic policy research think tanks, carried out the 132nd Round of its Business Expectations Survey (BES) in March 2025. NCAER has been carrying out the BES every quarter since 1992, covering 448 firms across four regions.

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