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  • 14.1 A Paper On Developing The Frame Of Bigger Units/Business Register

14.1 A Paper on Developing the Frame of Bigger Units/Business Register

  • Introduction
    • At present an up-to-date frame of enterprises at the national level is available only in respect of the units/ factories covered under the Annual Survey of Industries (ASI). The ASI presently covers the relatively bigger units belonging to manufacturing and repair sub-sectors that are registered under sections 2m(i) and 2m(ii) of the Factories Act 1948 or under the Bidi & Cigar Workers (Condition of Employment) Act. For the other sub-sectors, no such satisfactory frame of bigger units/ enterprises exists at present. For planning any survey of such units, like the proposed Survey of Non-Manufacturing Industries (SNMI), it would be desirable to develop a frame of bigger units belonging to the respective sub-sectors. The subsequent paragraphs suggest an approach to developing and updating such a frame. It is further suggested that certain additional items of information might also be included in the in-built frame so that it serves the requirements of a Business Register. Ministry of Statistics & PI (MoS&PI) should be given the responsibility to take up the work.
  • Steps for developing the frame
    • Initial frame.
      • The data of fourth Economic Census (EC-98) may be utilized to prepare first an initial list of bigger units/ enterprises (i.e. those employing certain minimum number of workers) in the entire non-agricultural sector including (a) manufacturing and repairing sub-sectors covered under ASI and (b) public sector enterprises[1]. The list at the enterprise level should contain all available identification particulars of the enterprises, activity code of the enterprise, number of workers in the enterprise, type of ownership, agency with which registered, etc. The cut-off point of minimum number of workers in the enterprises to be included in the list may be so decided that the work is kept within a manageable limit. The ultimate objective should be to include all enterprises with at least 10 workers in the suggested frame of units/ enterprises so that it is possible to plan independent surveys of these enterprises by utilizing this list as a frame for sampling. However, this ultimate objective should be achieved in a gradual manner as suggested in the following table.

        Stage

        Composition of units/

        enterprises

        All non-agricultural activities

        Manufacturing and repairing activities

        All

        Non-government

        All

        Non-government

        1

                  2

        3

        4

        5

        6

        1 (to achieve within 1 year)

        50 or more workers

        87,536

        54,183

        35,068

        34,072

        2 (to achieve within 5 years)

        20 or more workers

        3,01,550

        1,90,938

        1,07,460

        1,05,661

        3 (to achieve within 10 years)

        10 or more workers

        8,20,001

        5,73,206

        2,88,349

        2,85,232
    • Pilot study..
      • As the EC’98 data do not have the addresses of the enterprises, it would be worthwhile to take up a pilot project in certain areas for assessing the problems, if any, that are likely to be faced in the actual identification of the enterprises based on the particulars available in the EC’98 data/ initial list. In case there are difficulties in identifying the enterprises with fewer numbers of workers, the work of preparing the initial list of enterprises could be confined to the enterprises with higher number of workers.
    • Supplementing the initial list.
      • The initial list/ frame so developed should be supplemented by utilizing other lists viz. (i) the ASI frame and (ii) lists maintained by or the information available from the other sources/ agencies like the Chief Inspectors of Factories/ Department of Company Affairs/ Development Commissioner, Small Scale Industriers/ Municipalities and Sales Tax Departments of State and Union Territory Governments/ various Associations or Chambers of Commerce (e.g. FICCI, CII, NASSCOM)/ Tata Yellow Pages/ listing of enterprises based on web sites of business associations and other agencies, etc.
      • The supplemented list/ frame of enterprises so developed by including in it the units with minimum specified number of workers should be extended further to include (i) other enterprises in the emerging areas like e-commerce/ software development/ hardware manufacturing and marketing/ etc. and (ii) the units contributing significantly in terms of annual receipts/ turnover, by foregoing the eligibility criterion of minimum number of workers in each case. This becomes the final list/ frame of enterprises as referred to in the proposal.
    • Unique coding
      • It would be desirable to evolve a unique coding system for all enterprises included in the list/ frame. While devising the unique coding system, it should be ensured that the identity of the enterprises does not get lost while they change their activity, type of ownership, location, etc. Reporting the proposed unique codes by the units should be made mandatory, if necessary by making amendments in the existing laws, for purposes like paying sales tax, excise duty, income tax, license fee, electricity bill, telephone bill, etc. or in getting facilities like bank loans and other incentives from government or other bodies. The prescribed forms by the respective authorities in this regard should, therefore, include an item where unique code/ identification number of the enterprise could be recorded. The newly created enterprise should approach the authorized central agency (MoS&PI) for getting its unique identification number.
    • Updating the frame
      • Implementation of the Unique Coding System would not only help in identifying the new units coming into existence but also in understanding whether the already existing units are currently in operation or not. Non-payment of electricity bill/ telephone bill/ sales tax/ etc. for a reasonably long period would give an indication about the non-existence of the enterprise – the fact that may have to checked by corresponding with the enterprise and also by paying visit to it in rare cases. Thus the scheme would be extremely useful for updating the list of enterprises. Further, completeness of the ASI frame or the frame of companies maintained by the Department of Company Affairs could also be crosschecked with the help of this list of bigger units/ enterprises.
      • Regional Offices of the Field Operations Division (FOD), NSSO, should be actively engaged in the work of updating the frame. For this purpose, they should interact with (a) agencies collecting various dues or giving certain facilities to the enterprises like State/ Union Territory Governments, banks, authorities collecting telephone/ electricity bills, etc. and (b) other authorities maintaining different lists of enterprises for their own purpose like the Industrial Statistics Wing of the CSO, Chief Inspectors of Factories (CIFs), Department of Company Affairs, DCSSI, CII, NASSCOM, etc. Further, the MoS&PI should take steps to update the list by identifying eligible enterprises based on the regular enterprise surveys of the NSSO and the periodic Economic Censuses. Additional resource requirements of the MoS&PI for undertaking the work should be met.
    • Satisfying the requirements of a Business Register
      • The suggestions given above for developing and updating the list/ frame of bigger enterprises are solely from the viewpoint of devising a frame for sampling purposes. However, for further enhancing the utility of this frame certain additional items of information with respect to each enterprise should be added in the built-in list, so that this ultimate document might be described as the Business Register (BR). A technical group should be constituted by the MoS&PI to deliberate on the matter. It is, however, recommended that the contents of the above list/ BR should be finalized such that the following additional benefits are available to various users:
        • For the Private entrepreneurs
          • (a) Establishing business profile for a specific area; (b) Reduction in response burden by designing a prescribed format and advising the enterprises to fill up the same so that the number of existing returns can be reduced to a bare minimum; (c) Setting up a ‘single agency system’ for receiving the returns from the enterprises and analyzing and processing the same is a necessity to achieve the purpose; and (d) Analyzing existing potential business markets; and (e) Assessing/ assisting market research.
        • For the Government
          • (a) Reducing administrative burden; and (b) Improving efficiency in registration system.
    • Conclusions
      • It is suggested that:
        • The work of preparing and regular updating of the frame of bigger/ significant units in the entire non-agricultural sector should be taken up as a task on a priority basis by the MoS&PI.
        • Over a period of ten years from now, the ultimate objective to include all enterprises with at least 10 workers in the above frame should be achieved in a gradual manner. Additional resource requirements of the MoS&PI for taking up the work should be met.
      • A technical group should be immediately set up by the MoS&PI to finalize the coverage of the frame, its additional item requirements for serving as a Business Register, method of updating the frame, and other operational aspects
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