Mystery of 40,000 manufacturers disappearing from tax data amid Covid-19

Companies' share in overall corporate profit has declined as India tries to boost sector

As many as 40,175 manufacturers dropped out of India’s list of taxpayers in the aftermath of Covid-19 that struck the world early in 2020.

A total of 816,021 manufacturing businesses paid taxes in assessment year 2019-20 (AY20), broadly corresponding to income they earned in Financial Year 2018-19 (FY19). Nearly five per cent of them dropped out of the taxpayers list, which stood at 775,846 in AY22.

It is not clear if the situation has improved as tax numbers are only available till AY22. But a third of manufacturing segments showed output below where they were more than a decade ago,