CHAPTER

ANNUAL SURVEY OF INDUSTRIES, 2003-04, VOL. I:

STATISTICS ON EMPLOYMENT AND LABOUR COST

CHAPTER-I

INTRODUCTION

1.1 Background

The economic development of a country depends upon its industrial development. The pre-requisites for systematic development are the availability of adequate and reliable data on various aspects of industrial activities like inputs, outputs, wage bills, working days, mandays worked, absenteeism, labour turnover, earnings, employment, labour cost, bonus and welfare expenses, etc. One of the steps taken in this direction was the setting up of the Directorate of Industrial Statistics to enforce the Industrial Statistics Act, 1942. Under the guidelines provided by this Directorate, the first Census of Manufacturing Industries (CMI) was conducted in 1946. The CMI was also conducted in 1944 and 1945 on a voluntary basis, but the results could not be tabulated because of the poor response and quality of the returns. Similarly, the Directorate of National Sample Survey conducted Sample Surveys of Manufacturing Industries from 1949 to 1958 in all the 63 industry groups, except those belonging to the Railways and the Defence. Later on the Industrial Statistics Act, 1942 was repealed by the Collection of Statistics Act, 1953 and Rules framed thereunder in 1959 regarding the Statistical Authority and procedure for collection of data.

The process for launching Annual Survey of Industries (ASI), under the Collection of Statistics Act, 1953, therefore, was initiated in 1959 and the Census of Manufacturing Industries and Sample Survey of Manufacturing Industries were discontinued. The labour part of the ASI Schedule (Part-II), which contains statistics on Absenteeism, Labour Turnover, Earnings, Employment and Labour Costs, was launched with effect from the ASI-1961. During that year, the Schedule was canvassed in respect of both the Census and the Sample Sectors. However, due to non-availability of detailed statistics in respect of the units in the Sample Sector, it was decided to canvass Part-II Schedule only for the Census Sector in subsequent years. The ASI in Sample Sector was, however, reintroduced with effect from the ASI 1976-77.

Under the Collection of Statistics Act, 1953, the field survey for the ASI is conducted by the Field Operations Division (FOD) of the National Sample Survey Organisation (NSSO) through its network of zonal, regional and sub-regional offices located all over the country. The Deputy Director General, FOD, is the Statistics Authority appointed under the Act for successful execution of the survey programme. The Central Statistics Organisation (CSO) is responsible for the processing and dissemination of data collected through Part-I of the ASI Schedule. Labour Bureau, likewise, is responsible for processing and dissemination of data on employment, mandays worked, social security benefits, labour cost and cost of production collected through Block-E of Part-I and; absenteeism, labour turnover and earnings collected through Part-II of the ASI schedule. The Standing Committee on Industrial Statistics provides guidance in this regard and suggests improvements from time to time in the sampling design, sample size, and techniques of data collection, processing and tabulation of data. The Committee has been constituted by the Ministry of Statistics & Programme Implementation and is represented by the CSO, NSSO, Labour Bureau, Ministry of Industry, State Governments, Reserve Bank of India, FICCI, CII, ASSOCHAM, research institutions, eminent scholars and other central Ministries.

1.2 Objectives of the ASI

The main objectives of the Annual Survey of Industries (Labour Part) are:

a. To build a systematic database on Absenteeism; Labour Turnover; Earnings; Employment, and Labour Cost in Manufacturing Industries, and

b. To analyse various components of Labour Costs such as Wage/Salary; Bonus; Provident Funds; Welfare Expenses, etc. in Manufacturing Industries.

1.3 Scope and Coverage

The scope of the ASI extends to the entire country except the States of Arunachal Pradesh, Mizoram, Sikkim and the Union Territory of Lakshadweep. The coverage of ASI is extended to the following factories/establishments/workshops:

(a) All factories registered under sections 2m(i) and 2m(ii) of the Factories Act, 1948 which refer to the establishments using power and employing 10 or more workers and those not using power and employing 20 or more workers on any day of the preceding 12 months; and

(b) Bidi and cigar manufacturing establishments registered under the Bidi and Cigar Workers (Condition of Employment) Act, 1966.

With effect from ASI 1998-99, all electricity undertakings engaged in the generation, transmission and distribution of electricity, and registered with the Central Electricity Authority other than captive units are being kept outside the purview of the survey. Similarly, with effect from ASI 1999-2000, the departmental units such as Railway workshops, Road Transport Corporation workshops, Government mints, sanitary, water supply, gas, storage, etc. are also being kept outside its purview. Also, the defence factories, technical training institutions, jail factories, units engaged in storage and distribution of oil, restaurants, cafes and computer services are excluded from the scope of the survey. However, certain activities like cold storage, water supply, gas production and distribution, motion picture production, laundry services, repair of motor vehicles and of other consumer durable are covered under the survey.

1.4 Unit of Enumeration

The primary unit of ASI is a factory in the case of manufacturing industries; a workshop in the case of repair services; an undertaking or a licensee in the case of electricity, gas and water supply undertakings; and an establishment in the case of bidi and cigar industries.

1.5 ASI Frame

The ASI frame is based on the lists of registered factories/units maintained by the Chief Inspector of Factories in each state and those maintained by the registration authorities in respect of the bidi and cigar establishments. The regional offices of FOD update the frame every year by adding the names of the newly registered units/establishments. The frame is revised once in three years by removing the names of the de-registered units from the ASI frame and adding those of newly registered units to the frame.

1.6 Classification of Factories

For the purpose of the ASI, factories in the frame are classified into two sectors, viz. the Census Sector and the Sample Sector. For ASI 2003-04, the Census Sector consists of the following categories.

a. All factories in five less industrially developed States/Union Territories; viz. Manipur, Meghalaya, Nagaland, Tripura and Andaman & Nicobar Islands.

b. All factories employing 100 or more workers for rest of the States/Union Territories.

c. All factories declared as submitting 'Joint Returns' as identified by FOD, NSSO.

The units not covered under the Census Sector are covered under Sample Sector.

1.7 Sampling Design and Sample Allocation

The sampling design recommended by the Technical Committee headed by Prof. Arijit Chowdhury, ISI, Kolkatta for ASI 1997-98 has been followed for ASI 2003-04 also, with stratum as state x NIC-1998 (4-digit level).

The sample size n for any industry at all India level is determined first by assuming the Central Limit Theorem applicable to the large population. For a suitable characteristics X, say GVA, for 100p% variation in the estimates, the probability

_ _ _

P[ |x - X| ≤ p.X ] = 0.99 is ensured.

Accordingly, it follows that

n = (2.58/p)².(C.V.)²

Assuming p=0.10 and calculating C.V. from ASI 2002-03, the sample size n for each industry at NIC-1998 4-digit level is determined. The total sample size n_i for i^th state/UT is then allotted in proportion to the number of units in the state.

N'_i

n_i = n.----, where

N'	=	Total number of units in the sample sector at All India Level
N'_i	=	Total number of units in the sample sector in the i^th state/UT

For the sake of achieving better efficiency in the Sample Sector estimates, sub-stratification of Sample Sector units was adopted as below:

(i) units having 40 to 99 workers as sub-stratum 1,

(ii) units having 20 to 39 workers as sub-stratum 2, and

(iii) units having less than 20 workers as sub-stratum 3.

The total gross allotment of units for ASI 2003-04 was also restricted to 43000 units as in previous ASI round.

1.8 Estimation Procedure

Let

N_j	=	Number of units considered for selection from the j^th stratum
n_j	=	Number of sample units selected from the j^th stratum
N'_j	=	Number of units reported to exist in the frame in j^th stratum
n'_j	=	Number of sample units reported in the j^th stratum
T	=	Aggregate of a characteristics in a state/UT
T_j	=	Aggregate of a characteristics in j^th stratum
M_j	=	N'_j/n'_j, the multiplier for the j^th stratum

Then, for any characteristics, its estimate T is given by

T = ∑ M_j.T_j

In case N’j and n’j are not known, Mj can be estimated, by using the formula M_j = N_j/n_j with the assumption that N_j/N'_j = n_j/n'_j.

1.9 Schedule used for Enquiry

The ASI schedule is the basic tool to collect desired data and has been designed by the Standing Committee on Industrial Statistics to meet the national and international requirements for industrial statistics. The schedule is examined and reviewed in the light of the experience gained over time and necessary changes, if any, are made before launching the survey each year. With effect from ASI 1998-99, only Part-I and Part-II of the ASI Schedule are being canvassed. From ASI 1999-2000 onwards, Block-4 and Block-5 of Part-II of the schedule, which contained labour statistics on employment, mandays worked, labour cost on wages/salaries, bonus, provident funds and welfare expenses and total cost of production, have been merged with Block-E of Part-I of the ASI schedule. With effect from ASI 2002-03, Block-3 of Part-II of the ASI schedule was discontinued and Block-E of Part-I was modified by including a column on mandays paid for all category of workers. A facsimile of Block-A, Block-B, Block-E, Block-F, Block-H and Block-I of Part-I of the ASI schedule is enclosed at Annexure-I.

1.10 Reference Period

Reference period for ASI 2003-04 was the accounting year of the factory, ending on any day during the fiscal year 2003-04. In ASI 2003-04, data collected from the respective units, thus, relates to their accounting year ending on any day between April 1, 2003 and March 31, 2004.

1.11 Period of Survey

The total survey period for ASI 2003-04 has been from September, 2004 to April, 2005.

1.12 Concepts and Definitions

The concepts and definitions followed in the survey and used in the present Report are given below:

a. Workers are defined to include all persons employed directly or through any agency, whether for wages or not, in any manufacturing process or in cleaning any part of machinery or premises used for manufacturing process or in any other kind of work, incidental to, or connected with the manufacturing process or the subject of manufacturing process. Labour engaged in repair and maintenance or production of fixed assets for factory's own use or labour employed for generating electricity, etc. is also included.

b. Contract Workers are defined as all persons who were not employed directly by an employer but through the contractor. These workers may be employed with or without the knowledge of the principal employer.

c. Employees include all workers and persons receiving wage/salary and holding supervisory or managerial positions engaged in administrative office, store keeping and welfare sections, sales department as also those engaged in purchase of raw materials, etc or purchase of fixed assets for the factory and watch and ward staff.

d. Mandays worked is obtained by summing up the number of mandays worked by persons working in each shift over all the shifts worked on all days.

e. Mandays paid for is arrived at by summing up the number of employees paid each shift during the reference period. This also includes all mandays on weekly off-days and scheduled holidays, if paid for, and other absences with pay, as also mandays lost through lay-off/strike for which compensation is payable.

f. Wages/salaries are defined to include all remuneration in monetary terms and also payable more or less regularly in each pay period to workers as compensation for the work done during the accounting year. It includes:

i) Wages and salaries including paid for leave period and holidays;

ii) Payment for dearness, overtime, compensatory, house rent and other allowances;

iii) Production bonus, good attendance bonus, incentive bonus, etc. which are paid more or less regularly for each pay period; and

iv) Lay-off payments and compensation for unemployment except where such payments are made from trust or other social funds set up especially for this purpose.

The amount of wages/salaries payable during the accounting year are expressed in terms of gross value i.e. before deductions for fines, damages, taxes, provident fund, employees' state insurance contribution, etc. For workers employed through contractors, payment made to these workers and not the payment made to the contractors are recorded. Benefits in kind (perquisites) of individual nature are only included. It excludes employer's imputed value of group benefits in kind and travelling and other expenditures incurred for business purposes and reimbursed by the employer.

g. Bonus includes profit sharing bonus, festival bonus, year-end and other bonuses and ex-gratia payments paid at less frequently intervals (i.e. other than bonuses paid more or less regularly for each pay period).

h. Provident and other funds include employers’ contribution to old age benefits like provident fund, pension, gratuity etc. and contributions to other social security benefits such as the Employees’ State Insurance (ESI), compensation for work injuries and occupational diseases, provident fund linked insurance, retrenchment and lay-off benefits.

i. Workmen and Staff welfare expenses include expenditures incurred by employer on maternity benefits; crèches and other benefits such as supply of food, beverages, tobacco, clothing and group lodging at concessional rates; educational, cultural and recreational facilities and services; and grants to trade unions and co-operative stores meant for the employees. All group benefits were also included.

j. Public Sector covers the establishments, which are

i) Wholly owned by Central Government;

ii) Wholly owned by State and/or Local Government; and

iii) Wholly owned by Central Government and State and/or Local Government jointly.

k. Joint Sector covers the following type of ownership:

i) Central Government and private enterprise jointly;

ii) State Government/Local Government and private enterprise jointly; and

iii) Central, State/Local Government and private enterprise jointly.

l. Private Sector covered establishments wholly owned by any private person or persons.

1.13 Classification of Industries

The new series of industrial classification (NIC-1998) was introduced with effect from the ASI 1998-99. All the industrial units in the ASI frame were accordingly classified in their appropriate industry groups on the basis of the value of the principle product manufactured by them. The unit, thus, got classified in one and only one industry group even though it might be manufacturing products belonging to different industries. The different aggregates are presented at 3-digit and 5-digit level corresponding to this classification. An extract from this classification showing industry groups along with their descriptions and codes used in this publication is reproduced at Annexure-II.

1.14 Processing and Tabulation of Data

The data on CD, corresponding to the employment, mandays, labour cost and total cost of production under Block-A, Block-B and Block-E of Part-I of the ASI schedule, were received from CSO, IS Wing, Kolkata as per the directive of the Standing Committee on Industrial Statistics. ASI Section, Labour Bureau processed and tabulated the data using FoxPro for Windows software developed for the purpose.

1.15 Presentation of Data

Data presented in this publication correspond to ASI 2003-04, Vol.I and contain data on Employment; Mandays Worked and Mandays Paid for; Wages/Salaries; Earnings; Labour Cost; and total Cost of Production by States, Sectors and Industries at 3-digit and 5-digit levels of NIC-1998.

The data relating to Mandays Worked, Mandays Paid for, Labour Cost and Cost of Production are rounded off to thousands, separately at different aggregate levels of all India, States, Industries and Sectors. Therefore, these figures at higher level aggregates may not tally with the lower level aggregates due to rounding off errors, if any.

It has been decided to publish the detailed information corresponding to industry codes 014 to 372 at 3-digit level and 01401 to 37200 at 5-digit level following NIC-1998. For industry codes equal to and greater than 400 at 3-digit level and 40000 at 5-digit level, the units have been clubbed and shown under a common industry code 400 and 40000, respectively, in different tables.

The rounded off figures of mandays, labour cost and cost of production to thousands, have been shown by '0', wherever these figures were found to be negligible (less than 500). The figures found to be nil or not applicable have been indicated by a dash (-).

Data for the cases, where the number of factories is less than 3, have not been published in the Table presented at 5-digit level of NIC-1998.

*****