7.5 Introducing a survey of non-manufacturing industries

Current Status
- 7.5.1 At present the independent scheme of collection of data pertaining to bigger units or enterprises on an annual basis exists only for those enterprises belonging to the manufacturing and repair sub-sectors. The Annual Survey of Industries (ASI) aims to collect data with respect to the units in these sub-sectors that are registered under sections 2m (i) and 2m (ii) of the Factories Act 1948 or under Bidi and Cigar Workers (Condition of Employment) Act, i.e. the units employing 10 or more workers and using power or 20 or more workers but not using power. The sub-sectors of (a) electricity, gas and water supply, and (b) storage and warehousing, covered so far under the ASI till recently, have also been discontinued from such coverage since ASI 1998-99 for which the survey was carried out during 1999-2000.
- 7.5.2 For sub-sectors other than manufacturing and repairing, there exists no such scheme of independent collection of data from bigger units on a regular basis. The existing Follow-up Enterprise Surveys (FuS) on the Services Sector, carried out by the MoS&PI, collect data for all types of enterprises (other than those in the public sector), irrespective of their size, through these integrated surveys by bringing all such enterprises under the same survey coverage.
Deficiencies
- 7.5.3 The existing approach to data collection for all types of enterprises, irrespective of their size, through the same integrated survey (i.e. FuS) has the following limitations:
  - The integrated survey may not ensure adequate representation of bigger units in the sample (such units are fewer in number as compared to the smaller units but their contribution to the total work force and GDP is quite substantial);
  - Inclusion of few such bigger units in the sample may distort the estimated results to a great extent;
  - Non-inclusion of bigger units in the sample may underestimate survey parameters; and
  - Due to the highly-skewed distribution of enterprises in the population in terms of number of workers, estimates based on the existing integrated Follow-up Enterprise Surveys are likely to be subject to a large margin of sampling error.
Conclusions and Recommendations
- 7.5.4 To overcome the above limitations and to improve the database, a Survey of Non-Manufacturing Industries (SNMI) for bigger units, other than those in the public sector, should be introduced on the lines of ASI. The term ‘non-manufacturing’ used in the SNMI would refer to all non-agricultural activities other than manufacturing and repairing. ‘Bigger units’ would refer to those units or enterprises having a certain minimum number of workers and/or those contributing significantly in terms of annual turnover. The residual category of smaller units should be covered through the usual Follow-up Enterprise Surveys of Economic Census (EC).
- 7.5.5 The development of the list of bigger units or Business Register (BR), discussed by the Commission in paragraphs 14.2.26 to 14.2.28 of Chapter 14 on Indian Statistical System, would make available a proper frame of eligible enterprises to be covered under the SNMI. The ultimate objective should be to bring all units with at least 10 workers and other units having a significant annual turnover under the coverage of the SNMI. However, in case a problem occurs in the effort to immediately develop a list of all bigger units with at least 10 workers; a higher cut-off point (say, 20 or more workers in the enterprise) could also be considered for implementation of the scheme. Thereafter, the ultimate objective should be achieved in a gradual manner. The residual category of smaller enterprises, i.e. those not covered under the SNMI, should be surveyed through the usual Follow-up Enterprise Surveys of EC by adopting a two-stage sampling design as done at present.
- 7.5.6 It may be re-iterated that the survey coverage of the SNMI should also include enterprises in emerging areas like e-commerce, software development, hardware manufacturing and marketing, etc. if they qualify as per the definition of ‘bigger units’ discussed above.
- 7.5.7 The Commission desired to form an idea about the composition of units in the frame of the SNMI in terms of the number of units and their distribution by size class of employment for various activity groups before making the recommendations on the scheme. Annexe 7.10 gives the distribution of enterprises (other than manufacturing and repairing) as per the Fourth Economic Census (1998). It may be seen from the Annexe that the total number of eligible units in the frame of SNMI would be about 3 lakhs if units with at least 10 workers are included under the coverage. However, if the survey considers enterprises employing at least 20 workers and other significant units, the total number of such units in the frame would be of the order of about 1 lakh. A technical committee should be appointed to go into the details of the survey coverage, sample size, sample design, method of data collection, etc.
- 7.5.8 As the existing database for the Corporate Sector suffers from serious limitations, the SNMI should also take into account the Private Corporate Sector units. The Commission has recommended the strengthening of the Department of Company Affairs (DCA) and Registrars of Companies (ROCs) for processing and dissemination of Corporate Sector Statistics in respect of a set of variables for monitoring and policy formulation. Once this is achieved, the coverage of the SNMI should be modified to exclude the Corporate Sector units so as to avoid duplication of work.
- 7.5.9 Thus the Commission recommends the following:
  - To improve the database, it would be desirable to carry out a survey of bigger units in the sub-sectors other than manufacturing and repairing. For this, an appropriate method of data collection and other methodological aspects need to be first worked out. Also, as the subjects of trade and services are in the States’ domain, it will be necessary to decide upon an appropriately decentralised survey mechanism in collaboration with States.