India – Fifth Economic Census 2005

The Central Statistical Organisation (CSO), since its inception, has been instrumental in creation of database for various sectors of the economy and its periodic updation so as to meet the requirements of the planners for sound and systematic planning both at the macro as well as micro level. While data requirements may be enormous in various sectors, the judicious collection and maintenance of data for various sectors within the available resource is a challenge. Our economy can broadly be classified into two sectors namely Agricultural and Non- Agricultural sectors. Fairly reasonable database exists for Agriculture Sector where as such data base for Non-Agricultural sector is much to be desired. Keeping in mind the importance of the non-agriculture sector in the economy and the non-availability of basic frame for adoption in various sampling techniques for collection of data and estimation of various parameters, Economic Census was felt necessary. The Economic Census is a small attempt of the CSO for preparing frame of establishments which could be used for various censuses as well as surveys for collection of detailed data particularly on non-agriculture sector of the economy.

2. EARLIER ATTEMPTS

Broadly the entire planning period may be divided into two, Prior to conduct of the First Economic Census i.e prior to 1976 and thereafter i.e. after the economic census was carried out periodically. Efforts to fill up the data gaps for the non-agricultural sector were made right from the beginning of the First Five Year Plan. The First National Sample Survey (NSS) round (1950-51) covered non-agricultural household establishments as one of its subject themes. Such establishments were covered regularly up to the tenth round (1955-56). Subsequently, selected activities were taken up for survey intermittently in different rounds (14th, 23rd & 29th rounds). Establishment schedules were canvassed in 1971 population census. The census of unorganised industrial units was carried out during 1971-73. Census of the units falling within the purview of Development Commissioner, Small Scale Industries, was carried out during 1973-74 and a survey on distributive trade was conducted by some of the States during the Fourth Five-Year Plan period (1969-74). All such efforts made prior to 1976 to collect data on non-agricultural establishments have been partial and sporadic. Area sampling with probability proportional to population were mostly used even to capture establishments. For a survey of establishments such sample design is not only inefficient but also results in under coverage of desired number of establishments and low reliability of the estimates derived. The prolonged efforts of Statisticians and Planners in finding a way out for collection of information on amorphous areas of activity resulted in a decisive breakthrough with the advent of conduct of Economic Census.

3. ECONOMIC CENSUS

The first coordinated approach was made by the Central Statistical Organisation (CSO), Government of India, by launching a plan scheme ‘Economic Census and Surveys’ in 1976. The scheme envisaged organising countrywide census of all economic activities (excluding those engaged in crop production and plantation) followed by detailed sample surveys of unorganised segments of different sectors of non-agricultural economy in a phased manner during the intervening period of two successive economic censuses.

The basic purpose of conducting the economic census was to prepare a frame for follow up surveys intended to collect more detailed sector specific information between two economic censuses. In view of the rapid changes that occur in the unorganised sectors of non-agricultural economy due to high mobility or morbidity of smaller units and also on account of births of new units, the scheme envisaged conducting the economic census periodically in order to update the frame from time to time.

4. FIRST ECONOMIC CENSUS (EC -1977) AND FOLLOW UP SURVEYS

The First Economic Census was conducted through-out the country, except Lakshadweep, during 1977 in collaboration with the Directorate of Economics & Statistics (DES) in the States/Union Territories (UT). The coverage was restricted to only nonagricultural establishments employing at least one hired worker on a fairly regular basis. Data on items such as description of activity, number of persons usually working, type of ownership, etc. were collected.

Reports based on the data of EC-1977 at State/UT level and at all India level were published. Tables giving the activity group-wise distribution of establishments with selected characteristics and with rural and urban break up were generated. State-wise details for major activities and size-class of employment, inter-alia, were also presented in tables.

Based on the frame provided by the First Economic Census, detailed sample surveys were carried out during 1978-79 and 1979-80 covering the establishments engaged in manufacturing, trade, hotels & restaurants, transport, storage & warehousing and services. While the smaller establishments (employing less than six workers) and own account establishments were covered by NSSO as part of its 33rd and 34th rounds, the larger establishments were covered through separate surveys. Detailed information on employment, emoluments, capital structure, quantity & value of input, output, etc. were collected and reports giving all important characteristics on each of the concerned subjects were published.

5. SECOND ECONOMIC CENSUS (EC-1980) AND FOLLOW UP SURVEYS

The Second Economic Census was conducted in 1980 along with the house-listing operations of 1981 Population Census. This was done with a view to economizing resources, manpower, time and money. The scope and coverage were enlarged. This time all establishments engaged in economic activities – both agricultural and non-agricultural whether employing any hired worker or not – were covered, except those engaged in crop production and plantation. All States/UTs were covered with the sole exception of Assam, where Population Census, 1981 was not conducted.

The information on location of establishment, description of economic activity carried out, nature of operation, type of ownership, social group of owner, use of power/fuel, total number of workers usually engaged with its hired component and break-up of male and female workers were collected. The items, on which information were collected in Second Economic Census, were more or less the same as those collected in the First Economic Census. However, based on experience gained in the First Economic Census certain items viz. years of operation, value of annual output/turnover/receipt, mixed activity or not, registered/ licensed/recognised and act or authority, if registered were dropped.

The field work was done by the field staff consisting of enumerators and supervisors employed in the Directorate of Census Operations of each State/UT. The State Directorates of Economics & Statistics (DES) were also associated in the supervision of fieldwork. Data processing and preparation of State level reports of economic census and their publication were carried out by the DES.

Based on the frame thrown up by EC-1980, three follow-up surveys were carried out, one in 1983-84 on hotels & restaurants, transport, storage & warehousing and services, second in 1984-85 on unorganised manufacturing and third in 1985-86 on wholesale and retail trade.

The economic census scheduled for 1986 could not be carried out due to resource constraints. However, the EC- 1980 frame was updated during 1987-88 in 64 cities (12 cities having more than 10 lakh population and 52 class-I cities) which had problems of identification of enumeration blocks and changes due to rapid urbanization. On the basis of the updated frame, four follow-up surveys were conducted during 1988-89, 1989-90, 1990-91 and 1991-92 covering the subjects of hotels & restaurants and transport, unorganized manufacturing, wholesale & retail trade and medical, educational, cultural & other services respectively.

6. THIRD ECONOMIC CENSUS (EC-1990) AND FOLLOW UP SURVEYS

The Third Economic Census was synchronized with the house listing operations of the Population Census 1991 on the same pattern as EC- 1980. The coverage was similar to that of EC-1980. All States/UTs except Jammu & Kashmir, where Population Census 1991 was not undertaken, were covered.

Based on the frame thrown up by EC-1990 four follow up surveys were carried out: (i) Establishment Survey covering sectors of mining & quarrying, storage & warehousing in 1992-93; (ii) Establishment Survey covering sectors of hotels & restaurants and transport in 1993-94; (iii) NSS 51st round covering directory, non-directory and own account establishments in unregistered manufacturing sector in 1994-95 and (iv) Directory Trade Establishments Survey in 1996-97. NSS 53rd round covered the residual part of the unorganised trade sector in 1997.

7. FOURTH ECONOMIC CENSUS (EC-1998) AND FOLLOW UP SURVEYS

With a view to meeting the demand of various user departments for the data on unorganized sectors of the economy and considering the nature of large number of small units which are subjected to high rates of mobility and mortality, it was felt that the economic census must be brought back to quinquennial nature so that an up-to-date frame can be made available once in five years for conducting the follow up surveys. Fourth economic census was planned during 1996. But due to various reasons the scheme could be launched only in 1998.

The overall responsibility for organisation and conduct of the economic census rested with the CSO. The DESs of States/UTs were made responsible for conducting the field work and preparing the report for their respective States/Uts.

Based on the frame thrown up by Economic Census 1998, the following follow-up surveys were carried out:-

(i) Special establishment survey in unorganized sector 1998-99.

(ii) Survey on Unorganized Manufacturing sector: 2000-01

(iii) Survey on Unorganized establishments in services sector( excluding trade and finance) : 2001-02

(iv) Survey on Unorganized Manufacturing sector: 2005-06

(v) Survey on Unorganized establishments in services sector( excluding trade ) : 2006-07

8. FIFTH ECONOMIC CENSUS

The Fifth Economic Census was conducted in 2005. Quinquennial nature of the census could not be given effect to. The overall responsibility for organisation and conduct of Economic Census rested with the CSO. The DESs of respective States and UTs were made responsible for conducting the field work and preparing the report concerning to their States.

9. Brief Objective of Fifth EC

The main objective of Economic Census is to prepare a frame of all “establishments” engaged in various economic activities which serves as a basic input for conducting detailed surveys pertaining to any specific activity of the economy.To improve the utility of the data collected and to improve the quality of data generated new initiatives were introduced permitting to prepare directory of establishments employing 10 or more workers etc. ICR technology has been used for the first time in this data processing to avoid any possible error in transcription of the data.

The results of EC-2005 “ALL INDIA REPORT” contains the all India figures on the number of enterprises and their employment, cross-classified according to their locations, major activity groups, type of the establishments, size-class of the employment, etc. The disaggregated data for States/UTs are also included in the report. Unit level data of Enterprise Schedule are been made available to the user.

10. Highlight of the 5TH ECONOMIC CENSUS

* As per Economic Census 2005, 41.83 million establishments, 25.54 million in Rural area and 16.29 million in Urban area operated during the year 2005. While the

Non-agricultural establishments accounted for 35.75 million the agricultural establishments (excluding those engaged in crop production and plantation) accounted

for 6.08 million.

* Establishments registered a growth rate of 4.69% per annum (5.37% in Rural and 3.69% in urban) during the period 1998-2005 as their number increased from

30.35 million in 1998 (EC1998) to 41.83 million in 2005 (EC2005).

* Non Agricultural establishments grew at the rate of 4.16% per annum (4.56% in Rural and 3.67% in Urban) at the same time Agricultural establishments grew at

the rate of 8.32% per annum (8.62% in Rural and 4.42% in Urban) during 1998-2005.

* 26.94 million (64.41%) were Own Account Establishments (i.e. establishments without any hired worker) and the remaining 14.89 million (35.59%) were

establishments with hired worker. Own Account Establishments grew at the rate of 3.36% per annum (4.18% in Rural and 1.83% in Urban) while the growth of

establishments with hired workers was of the order of 7.50% per annum (8.83% in Rural and 6.30% in Urban) during the period 1998-2005.

* Out of 41.83 million establishments around 39.61 million establishments were under private ownership. Around 7.54 million (18.03%) worked without any

premises i.e. floating establishments, around 2.22 million (5.3%) were seasonal establishments. 76% of the establishments (31.74 million) worked without any

power.

* While Farming of Animals was the major Economic Activity (87%) pursued by the Agricultural Establishments, ‘retail trade’ (41.8%) followed by

manufacturing (23.3%), and Other community, social and personal service (7.3%) were the dominant activities of the Non-Agricultural Establishments.

* Around 100.9 million persons, 52.1 million in rural and 48.8 million in urban, were working in these 41.83 million establishments. While employment in own

account establishments were of the order of 35.7 million the employment in establishments with hired workers were of the order of 65.2 million. Agricultural

establishments provided employment to around 10.9 million persons at the same time the non agricultural establishments provided employment to around 90.0

million persons.

* The growth rate of employment during 1998 to 2005 was of the order of 2.78% per annum (3.88% in rural and 1.70% in urban). This is considerably higher than the growth rate (1.75%) observed

during 1990 to 1998.

* Out of the total employment of 100.9 million 78.3 million (37.6 in rural and 40.7 million in urban) were male, 20.2 million (13.0 million in rural and 7.2 million in urban) were female and around 2.4 (1.5 million

in rural and 0.9 million in urban) million were children.

* Around 54.4 million persons (53.9%) were hired workers and the remaining 46.5 million were own account workers. Out of these hired workers 41.3 million were male, 11.6 million were female and 1.5

million were children.

* Manufacturing Sector was the largest employer providing employment to 25.5 million (25.25%) persons. This was followed by 25.1 million persons (24.91%) in retail trading activity and 9.2 million

(9.13%) in Farming of Animals.

* Average employment per own account establishment was 1.33 and that per Establishment with hired workers was 4.38. Overall, average employment per establishment was 2.41 persons. Average

employment per establishment which was 2.88 in 1990 had come down to 2.75 in 1998 and further gone down to 2.41 in 2005.

* Distribution of establishments by size class of employments revealed that around 95% of establishments were having 1 to 5 workers, 3.42% of establishments employed 6 to 9 workers and only 1.51%

of establishments employed 10 workers and above.

* Among the States maximum growth rate of establishment during 1998-2005 was observed in Mizoram (9.71%) followed closely by Tripura (8.88%), Kerala (8.69%) and Tamil Nadu (8.44%). Highest

growth rate of employment was, however, observed in Jammu & Kashmir (6.82%) followed by Andhra Pradesh (5.87%), Kerala (5.86%) and Haryana (5.35%).

11. Concept and Definations of Important Terms

Concepts and definitions of some of the important terms used in the fifth Economic Census are given below:

Enterprise:

An institutional unit in its capacity as a producer of goods and services is known as an enterprise. An enterprise is an economic transactor with autonomy in respect of financial and investment decision making, as well as authority and responsibility for allocating resources for production of goods and services. It may be engaged in one or more economic activities at one or more locations. An enterprise may be a sole legal unit.

Establishment:

The establishment is defined as an enterprise or part of an enterprise that is situated in a single location in which one or predominantly one kind of economic activity is carried out. It is an economic unit under a single legal entity.

Own account Establishments:

An establishment without any hired worker on a fairly regular basis is termed as an own account establishment. It is normally run by members of the household.

Establishments with hired workers:

(i)Directory Establishment

An establishment with hired worker employing 6 or more persons daily on a fairly regular basis is termed as Directory Establishment.

(ii)Non Directory Establishment:

An establishment with hired worker employing less than 6 persons daily on a fairly regular basis is termed as Non Directory Establishment.

Agricultural Establishment:

An agricultural establishment for the purpose of Economic Census is defined as one engaged in livestock production, agricultural services, hunting, trapping & game propagation, forestry and logging, fishing (corresponding to Groups 012, 013, 014, 015, 020 and 050 of NIC-2004). Establishments engaged in activities pertaining to crop production and plantation (Group 011 of NIC-2004) are excluded from the coverage of Economic Census.

Non-agricultural Establishment:

Establishment engaged in economic activities other than those carried out by agricultural establishments are termed as non-agricultural establishment

Nature of Operation:

If the entrepreneurial activity is carried on through out the year more or less regularly is treated as perennial activity. If the activity of the establishment is confined to a particular season, the same is called the non-perennial activity or seasonal activity.

Power/fuel used:

If any or more sources of power/fuel are specifically used for carrying the entrepreneurial activity (other than lighting purposes or heating the premises etc.) it is considered as power/fuel used. The different sources of power/fuel considered are electricity, coal/soft coke, petrol/diesel, gas, firewood, kerosene, animal power, non-conventional energy (bio gas, solar and wind energy) and others such as atomic power etc. Establishment using none of these types of power/fuel, are categorized as operation without power.

In case more than one type of power/fuel is used for carrying out the entrepreneurial activity the code will refer to the major source or on which more expenditure is incurred.

Number of persons usually working daily :

The total number of persons i.e. workers usually working daily in an establishment. This will include all persons whether hired or not. The workers with age less than 15 years have been categorized as children. Household members whether paid or not if engaged in any of the activities carried out by the establishments will be included. The figure of number of persons is a position in the last year for perennial establishment and last working season for seasonal establishment. This also includes both supervisory and primary workers. A worker need not mean the same person is continued but refers to a position. Part time workers are also treated employees as long as they are engaged on a regular basis.

The Fifth Economic Census was conducted in all the States/UTs. All economic activities (agricultural and non-agricultural),

except those involved in crop production and plantation, related to production and/or distribution of goods and/or services

other than for the sole purpose of own consumption were covered.

However, as were done in earlier censuses, the following activities were kept out of the purview of the Fifth Economic Census.

(i) Establishments of shelter-less and nomadic population, which keep on moving from place to place and camp either without shelter or with makeshift shelter.

(ii) Establishments engaged in some activities like smuggling, gambling, beggary, prostitution, etc.

(iii) Domestic servants, whether they work in one household or in a number of households, drivers, etc. who undertake jobs for others on wages.

(iv) All wage-paid employees of casual nature.

(v) Household members engaged in household chores.

(vi) Persons doing different types of jobs depending on the availability of work e.g. loading, unloading, helping a mason or a carpenter, doing earthwork for a contractor.

(vii) Household members working for other households and earning some money which is insignificant.

(viii) Households in which none of the members is engaged in any gainful activity i.e. households depending on remittance, rent, interest, pension etc.

(ix) Owners of tube-wells, tractors, bullock carts, etc. who utilise their spare capacity to earn extra money, if the spare capacity utilisation is occasional and not on regular basis.