Transmission Gap Framework © 2026 Ahan Dasgupta.
The Transmission Gap Framework uses publicly available government data to answer one question: for every rupee of value that India's manufacturing sectors generate, how much reaches the workers who created it? This page explains how the calculation works, where the data comes from, and what the results mean. Economic value is measured as gross value added, computed from Annual Survey of Industries microdata. Transmission is measured as the labour share of incremental GVA during identified sector growth episodes.
All calculations use the Annual Survey of Industries (ASI), published every year by India's National Statistical Office under the Ministry of Statistics and Programme Implementation. The ASI is a mandatory survey of all registered factories under the Factories Act, 1948. Every factory must report its employment, wages, output, and gross value added. The framework uses two tables from each annual volume: Table 1 for gross value added and total output, and Table 3 for wages, salaries, and employment by category.
Wages are adjusted for inflation using the Consumer Price Index for Industrial Workers (CPI-IW), published by the Labour Bureau under the Ministry of Labour and Employment. The baseline year is 2021–22, which is set to an index of 100. All subsequent years are deflated accordingly to produce real wage figures.
Labour share is the fraction of a sector's gross value added that goes to workers as wages. Gross value added is the value the sector creates after deducting the cost of raw materials and inputs — it is the pool from which wages, profits, and other factor payments are drawn. A higher labour share means workers are capturing more of the value they help create.
The framework reports two versions of this: one using total emoluments including employers' contributions, and one using worker wages only (line 1.1.1 in ASI Table 3), which covers production workers specifically and excludes supervisory and managerial salaries.
The Transmission Gap measures how well a sector's growth is being shared with workers. It compares two things: the share of the sector's total value that normally goes to workers (the baseline), and the share of the extra value created during a growth period that actually went to workers (the marginal share).
A negative gap means workers captured a smaller share of the growth than their baseline share — the sector grew but the gains did not reach workers proportionately. A positive gap means workers captured more than their usual share — growth was distributed toward workers rather than away from them.
The Transmission Gap is not applicable when a sector's GVA declined during the observation period (as with textiles) or when GVA was non-monotonic — falling then recovering — during the period (as with pharmaceuticals). In these cases the framework reports labour share trajectories instead, which tell a different but equally meaningful story.
Sectors were selected on two criteria: they are labour-intensive registered manufacturing sectors covered by the ASI, and they have experienced significant export growth in the 2021–24 period, in several cases linked to India's preferential trade agreements with the UAE (CEPA, 2022) and Australia (ECTA, 2022). The seven sectors currently in the framework are gems and jewellery (NIC 3211), apparel (NIC 1410), textiles (NIC 1311–1313), leather (NIC 1512), footwear (NIC 1520), marine products (NIC 1020), and pharmaceuticals (NIC 2100).
Ahan Dasgupta is a researcher and social entrepreneur focused on the distributional effects of trade policy in India. He is the founder of Meri Mitti, a fair-trade platform for artisan communities in Jharkhand and Bihar, recognised by DPIIT and the United Nations.
The Transmission Gap Framework is his attempt to make the distributional consequences of India's export economy visible to the people who need to understand them.
Every year the government publishes factory data in a dense PDF. The framework automatically extracts the right numbers, runs the labour share calculation, stores the result, and displays it on a public website in plain English with charts — so a journalist, policymaker, or student can see in thirty seconds what would otherwise take an afternoon of government PDF navigation to find. The question has existed for decades. The data has existed for decades. This framework makes the answer public.
India's export economy is measured continuously and in detail. Bilateral trade volumes, tariff utilisation rates, export revenues, GDP contributions — these numbers are tracked, reported, and debated every quarter. What is never tracked is the number that matters most to the workers generating that growth: of every rupee of value their sector creates, how much actually reaches them?
The data to answer this question has existed for decades in the Annual Survey of Industries. The calculation is straightforward arithmetic. Nobody had done it systematically, made it publicly accessible, or updated it annually. The Transmission Gap Framework does all three.
The Transmission Gap Framework does not critique trade agreements. Trade agreements are instruments of commercial diplomacy whose purpose is to reduce tariffs and expand bilateral trade — not to protect workers. The framework does not evaluate trade or labour policy. Its purpose is narrower: to measure how much of growth reaches workers within sectors that have experienced significant export growth episodes. What conclusions policymakers, researchers, or the public draw from that measurement lies beyond the scope of the framework itself.
Dasgupta, A. (2026). Transmission Gap Framework. Zenodo. https://doi.org/10.5281/zenodo.20094088
Methodology and analysis released under Creative Commons Attribution 4.0 International (CC BY 4.0). Code released under the MIT License. For questions about the methodology, data, or research, contact ahan@merimitti.org.
Transmission Gap Framework © 2026 Ahan Dasgupta.
The Transmission Gap Framework is designed to be honest about what it can and cannot show. Every measurement tool has constraints. Understanding these limitations is essential for interpreting the findings correctly.
The Annual Survey of Industries covers only registered factories under the Factories Act. In gems and jewellery, this captures approximately 274,000 workers against an estimated 5 million total sector workforce. The informal majority — home-based piece-rate workers, small unregistered units — is invisible to this framework. The distributional outcomes documented here almost certainly understate the true extent of the transmission failure across the full workforce, because informal workers are structurally more vulnerable than their registered counterparts.
The framework documents patterns. It does not prove that any specific policy, trade agreement, or institutional feature caused the observed transmission gaps. Concurrent forces — post-COVID recovery dynamics, global commodity price movements, the secular global decline in labour share — may explain some or all of the patterns observed. Establishing causation requires a comparison group design (difference-in-differences) that this framework does not currently implement. The findings should be read as evidence that warrants investigation, not as proof of a mechanism.
The baseline year of 2021–22 falls within the post-COVID economic recovery period. Revenues may have recovered faster than wages adjusted in this year, meaning the baseline labour share could be temporarily elevated relative to a longer-run average. If true, the subsequent decline in labour share may partly reflect normalisation rather than genuine deterioration. Pre-pandemic ASI data (2019–20, 2020–21) would allow a more robust baseline to be constructed. This is a planned extension of the framework.
The Transmission Gap formula requires positive incremental GVA to be meaningful. Where GVA declined (textiles) or followed a non-monotonic path (pharmaceuticals), the framework reports labour share trajectories instead. These trajectories are informative but cannot be directly compared to the Transmission Gap figures reported for other sectors.
Real wages are deflated using CPI-IW, which tracks consumer prices for industrial workers. GVA is reported in nominal terms and is not deflated, because no sector-specific producer price deflator is readily available for most sectors in this framework. This means real wage comparisons with nominal GVA growth are not fully symmetric. If anything, this asymmetry understates the divergence between GVA growth and real wage growth.
The ASI is published approximately 12 to 18 months after the reference year ends. The framework therefore always reflects conditions from at least one year ago. It cannot track real-time developments in sector performance or respond immediately to policy changes. This is a constraint of the underlying data source rather than the framework's design.