Strengthening Country’s Industrial Statistics
Context:
The Indian government has been actively promoting industrialisation through various policy initiatives, making it essential to examine the statistical framework used to measure the country’s industrial sector.
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- The official statistical system relies on three key indicators to track industrial activities: the Index of Industrial Production (IIP), the Annual Survey of Industries (ASI), and manufacturing-related metrics within the National Accounts statistics.
- These are further supplemented by the National Sample Survey (NSS), which covers labour, employment, and the unincorporated sector, with the National Statistical Office aiming to release more frequent estimates.
Index of Industrial Production (IIP)
The IIP is an economic indicator that measures the output of the industrial sector in India, including manufacturing, mining, and electricity. The IIP is published monthly by the Ministry of Statistics and Programme Implementation (MoSPI).
Annual Survey of Industries (ASI)
The ASI is a comprehensive survey that collects data on the performance of the registered manufacturing sector in India. Conducted annually, the ASI provides a snapshot of the industrial landscape, which is essential for policy formulation and economic planning.
National Sample Survey (NSS)
The NSS is one of the oldest and largest household surveys in India, collecting data on various socio-economic indicators. Conducted in rounds, typically every year, the NSS covers multiple subjects, including employment, consumption, health, and education.
About Statistical Frameworks
- The ASI and National Accounts are critical tools for analysing industrial performance.
- The ASI, in particular, serves as the primary source for many industrial studies, offering a wealth of data.
- The Central Statistical Office has improved the timeliness of releases and made anonymised unit-level data available.
However, there are issues with the survey’s sampling frame and design:
- The ASI’s sampling frame is based on factory registrations under the Factories Act of 1948, but this coverage has limitations.
- Outsourcing, IT, and advanced manufacturing methods have reduced regular factory employment, leaving many high-value establishments outside ASI’s scope.
- Moreover, the NSS surveys on unincorporated enterprises may not fill these gaps, as many of these businesses belong to registered companies.
- Another challenge is the ASI’s establishment-based approach, requiring NSS surveyors to collect data on-site.
- Due to resource constraints, the survey is limited to around 60,000-70,000 establishments annually, split into census and sample sectors.
- The MCA’s method of assigning a company’s entire value addition to its primary sector leads to imprecision in sectoral assessments. This misallocation is expected to worsen with the rise of Industry 4.0.
Way Ahead
To address these issues, a dual strategy could be implemented:
- The GST register, which links enterprises and establishments, could be used to improve the ASI’s sampling frame and cover multi-state enterprises more effectively.
- Detailed GST filings could offer a comprehensive view of production and input usage, while employment data could be gathered through focused surveys.
- Additionally, gaps in the MCA data could be filled through a follow-up survey under the Collection of Statistics Act (2008), asking enterprises to report establishment-based value added.
- Targeting large listed companies could result in more complete data.
