ECONOMIC CENSUS IN KARNATAKA

DIRECTORATE OF ECONOMICS & STATISTICS BANGALORE, KARNATAKA

INTRODUCTION Reliable and timely data base is the basic necessity for any sound and systematic planning. Moreover, the availability of detailed information, preferably at Micro level is the key for effective planning. Though a fairly adequate system of agricultural statistics has already been developed in the country, such an information system has not yet been built up for the Non-Agricultural Sector, especially in un-organized sector though it assumes greater importance due to its significant contribution towards Gross Domestic Product and also in generation of employment in developing economy. But this data relating to this segment which would facilitate fair assessment of its share in the National/State Income and also its impact on the growth of income and employment are either scarce or not available at regular intervals.

DEFINITION The Economic Census (EC) is the official count of all entrepreneurial units located within the geographical boundaries of any country or a region & involved in any economic activity either in agriculture (excluding crop production and plantation) or in nonagricultural sectors of the economy. The units should be engaged in either production of goods or their distribution or in delivery of services or a combination of these, but not for the sole purpose of own consumption. OBJECTIVE The important objectives and benefits of Economic Census are It provides a fine, comprehensive sampling frame for undertaking large or small sample surveys on the status and activities of establishments in the un-organized sector. Bridges essential data gaps on all units of economic activity such as their number, the type of ownership, the nature of their operations, the kind of power or fuel used etc.

ADVANTAGES The economic census furnishes an important part of the framework for such composite measures as the gross domestic product estimates, input/output measures, production and price indices and other statistical series that measure short-term changes in economic conditions. Specific uses of economic census data include the following: Policymaking agencies of the government may use the data to monitor economic activity and to assess the effectiveness of policies. State, Central and local governments may use the data to assess business activities and tax bases within their jurisdictions and to develop labor laws, base for commercial tax etc. Trade associations and Individual businessmen may use the data to locate potential markets and to study market trends.

DATA LIMITATIONS 1. The First economic Censuses conducted in 1977 included turn over (both production and value) particulars. In the Second Economic Census these items have been dropped. Reasons for this may be explored to plug the data gaps and to be revived since it is very valuable information for multi-purposes. Hence, it is vital to correlate the census data with that of production results.

DATA LIMITATIONS contd. 2. The term Private Non-Profit institutions shall be clearly defined. All the societies registered under societies Registration Act 1960 should be covered and suitable space may be provided in the data sheets. At present, institutions which are financed and controlled by households e.g: Dharmashala, Trust or Temple etc. are treated as NonProfit Institutions (NPI). This definition does not cover the Sports Institutions, Education Societies etc. Economic Census 2005 gives about 55000 units of establishment under NPI, whereas NPI first phase survey has identified 192487 societies in Karnataka registered under Societies Registration Act 1960

DATA LIMITATIONS contd. 3. Less than 10 employees are employed in nearly 68% of the establishments. Information regarding these institutions will be of much value for analyzing their contribution in terms of employment, GSDP and formation of labor safety laws in unorganized sector. Name and address slips of the enterprises having less than 10 employees may be collected and published and the Directory of establishment with location details should be published on the website providing dynamic mechanism and proper publicity must be made to utilize the data by the public as like yellow pages.

4. The gap between the commencement of Economic Census and the publication of its results should be minimized to 10 months. Since delay makes the statistics less useful. An experience and well known Agency to be entrusted with this task to get qualitative and timely data.

DATA LIMITATIONS contd. 5. Once in five years, the list of Urban Frame Survey (UFS) blocks have to be updated by deleting the defunct enterprises. Unique ID to be given to each enterprise based on category wise, location wise and type of registration. This will help to track the status of the establishment. NGO`s and enumerators to be trained in census operations. Intensive theoretical training combined with field demonstration has to be imparted.

6.

7. Supply of information under economic census is purely voluntary and there is no statutory sanction behind it. Despite wide publicity through mass media some degree of non-co-operation on the part of informants is apprehended.

DATA LIMITATIONS concld. 8. The method of collection of data under economic census is not record based information but only oral information provided by the informants. In this method there is likelihood of under reporting of employment, unintended inaccuracy, recall lapse and casual approach on the part of the informants to some extent.

9. The data analysis has to be carried-out to know the trends. Thus mere data entry software or table generating software need not suffice; as such a methodology and software are to be developed to know the trend of the different industries across the census has to be developed.

ANALYSIS OF ECONOMIC CENSUS IN KARNATAKA: Establishments, Employment Vs GSDP Establishment and employment status with each activity and their proportion to total in Economic Census 1989-90, 1997-98 and 200405 is compared with the GSDP of respective year to know whether that the variation in GSDP is in line with the variation in Economic Census. Following are the statistics on Establishments, Employment and GSDP.

Establishment : Figures in brackets indicate percentage of sectoral contribution to the total

Sl. No Major Activity Group Agricultural Activities Mining and Quarrying Manufacturing Electricity, Gas & Water Construction Trade, Restaurants and Hotels No. of No. of No. of establish establish establish ments ments ments ECEC-2005 EC-1990 1998 208803 (12.33) 6024 (0.36) 306839 (18.11) 2198 (0.13) 19239 (1.14) 638304 (37.68) 259178 (13.56) 4675 (0.25) 388335 (20.31) 727 (0.04) 16093 (0.84) 728487 (38.11) 390602 (15.38) 8634 (0.34) 635544 (25.03) 3466 (0.14) 18202 (0.72) 920529 (36.26) % Variation over its share 1990-98 24.13 (9.98) -22.39 (-33.33) 26.56 (12.15) -66.92 (-69.23) -16.35 (-26.32) 17.72 (-7.10) % Variation over its share 1998-2005 50.71 (13.42) 84.68 (41.67) 63.66 (23.24) 376.75 (250.00) 13.11 (-14.29) 49.98 (-11.69)

1 2 3 4 5 6

Sl. No

Major Activity Group

No. of establishm ents EC-1990

No. of establish ments EC-1998

No. of establish ments EC-2005

% Variation over its share 1990-98

% Variation over its share 1998-2005

Transport, Storage, Warehousing & Communications Financial, Insurance, Real Estate and Business Services Community, Social and Personal services and other unspecified activities

36980 (2.18) 34111 (2.01)

42423 (2.22) 57970 (3.03)

88149 (3.47) 115348 (4.54)

14.72 (1.83) 69.95 (50.75)

107.79 (56.31) 98.98 (49.83)

441400 (26.06)

413743 (21.64)

358400 (14.12)

-6.27 (-16.96) 11.27 (-1.40) 12.85 (0.00)

-13.38 (-34.75) 30.01 (-2.11) 32.81 (0.00)

Non-Agricultural Activities

1485095 1652453 2148272 (87.67) (86.44) (84.62)

1693898 1911631 2538874 Total Agricultural & Non-Agricultural Activities (100.00) (100.00) (100.00)

Trade=Sales, Maintenance, Repairs + Wholesale Trade + Retail Trade

Employment : Figures in brackets indicate percentage of sectoral contribution to the total

Total No. of Employment EC-1990 674966 (13.28) 27573 (0.54) 1319827 (25.96) 13236 (0.26) 51608 (1.02) 1239194 (24.37) Total No. of Employment EC-1998 722646 (13.76) 17805 (0.34) 1336723 (25.44) 5103 (0.10) 48641 (0.93) 1481045 (28.20) Total No. of Employment EC-2005 813491 (12.82) 38951 (0.61) 1735429 (27.35) 23101 (0.36) 46438 (0.73) 1731270 (27.28) % Variation over its share 1990-98 7.06 (3.61) -35.43 (-37.04) 1.28 (-2.00) -61.45 (-61.54) -5.75 (-8.82) 26.15 (18.99) % Variation over its share 1998-2005 12.57 (-6.83) 118.76 (79.41) 29.83 (7.51) 352.69 (260.00) -4.53 (-21.51) 31.98 (-8.08)

Sl. No

Major Activity Group

1 2 3 4 5 6

Agricultural Activities Mining and Quarrying Manufacturing Electricity, Gas & Water Construction Trade, Restaurants and Hotels

Sl. N o

Major Activity Group

Total No. of Employment EC-1990 121905 (2.40)

Total No. of Employment EC-1998 122707 (2.34)

Total No. of Employment EC-2005 198461 (3.13)

% Variation over its share 1990-98 0.66 (-2.50)

% Variation over its share 1998-2005 61.74 (33.76)

Transport, Storage, Warehousing & Communications Financial, Insurance, Real Estate and Business Services Community, Social and Personal services and other unspecified activities

173069 (3.40)

236333 (4.50)

409910 (6.46)

36.55 (32.35)

73.45 (43.56)

1461891 (28.76) 4408303 (86.72) 5083269 (100.00)

1282436 (24.41) 4530793 (86.24) 5253439 (100.00)

1348535 (21.25) 5532095 (87.18) 6345586 (100.00)

-12.28 -15.13) 2.78 (-0.55) 3.35

5.15 (-12.95) 22.10 (1.09) 20.79

Non-Agricultural Activities Total Agricultural & NonAgricultural Activities

Trade=Sales, Maintenance, Repairs + Wholesale Trade + Retail Trade

GSDP at factor cost by industry of origin At current prices Figures in brackets indicate percentage of sectoral contribution to the total
Sl. No 1 2 3 4 5 6 Industry Agricultural Activities Mining and Quarrying Manufacturing Electricity, Gas and Water supply Construction Trade, Hotels and Restaurants 1989-90 697974 (34.88) 14023 (0.70) 339998 (16.99) 60712 (3.03) 112278 (5.61) 248029 (12.39) 1997-98 2141563 (29.32) 60441 (0.83) 1337387 (18.31) 170563 (2.34) 455617 (6.24) 921074 (12.41) 2004-05 3015316 (19.30) 190258 (1.22) 2869685 (18.37) 347698 (2.23) 1021876 (6.54)) 2214733 (14.18) % % Variation Variation of 1989-90 of 1997-98 to 1997-98 to 2004-05 206.83 (-15.94) 331.01 (18.57) 293.4 (7.77) 180.94 (-22.77) 305.79 (11.23) 271.36 (0.16) 40.80 (-34.17) 214.78 (46.99) 114.57 (0.33) 103.85 (-4.70) 124.28 (4.81) 140.45 (14.26)

Sl. N o
7 8

Industry

1989-90

1997-98

2004-05

% Variation of 198990 to 1997-98

263.78 (-0.17) 330.68 (17.99)

% Variation of 199798 to 2004-05

139.83 (11.99) 242.53 (60.16)

Transport, Storage and Communication Banking and Insurance, Real Estate, Ownership of Dwellings and Business services Public Administration and other services Total GSDP

118662 (5.93) 211295 (10.56)

431672 (5.92) 909998 (12.46)

1035293 (6.63) 3117010 (19.95)

198270 (9.9) 2001241

876261 (12.00) 7304576

1809851 (11.58) 15621720

341.95 (21.21) 265

106.54 (-3.50) 114

Here GSDP at current prices is considered, as all the three series of GSDP has different base years, converting it to a common base year is not possible, since there is no linking factor. Hence by converting this into constant prices using Consumer Price Index of base year 1960-61 as 100, it is observed that the activity wise proportion to it`s total does not change.

ANALYSIS OF ESTABLISHMENTS, EMPLOYMENT Vs GSDP

Agricultural Activities : The percentage of variation in employment in proportion to total in this sector during 1997-98, compared to 1989-90 rose positively by 3.61% but declined negatively by 6.83% during 2004-05 compared to 1997-98. Its variation in its percentage contribution to GSDP is -15.94% during 1997-98 compared to 198990 and -34.17% during 2004-05 compared to 1997-98. Whereas value wise variation is positive. But it is paradoxical to note a rise in percentage variation in number of establishments in proportion to total during the same period by 9.98% and 13.42% respectively. In total its contribution to GSDP is in decreasing rates whereas number of establishments are in increasing rate. Reason may be that these establishments are catering mostly to farmers who are in rural area.

Manufacturing: The percentage of variation in proportion to total in this sector with respect to establishment during 1997-98 is 12.15% compared 1989-90 and 23.24% during 2004-05, compared to 1998-99. The percentage of variation with respect to employment in proportion to total during 1997-98 compared to 1989-90, though negative at 2.00%, rose positively by 7.51% during 2004-05 compared to 1997-98 variation in it's contribution to GSDP is 7.77% during 1997-98 compared to 1989-90 but reduced drastically to 0.33% during 2004-05 compared to 1997-98. It can be observed that though the number of establishments has increased appreciably during three economic censuses, the same trend is not noticed with respect to employment and GSDP. Main reason may be that there is rise in automation in industry and the other is increase in highly paid technical professionals.

Construction: The percentage of variation in number of establishments in proportion to total is -26.32% during 1997-98 compared to 1989-90 and -14.29% during 2004-05 compared to 1997-98, and is on decreasing trend. In contrast, the percentage of variation in employment in proportion to total is negative from -8.82% during 1997-98 compared to 1989-90 and -21.51% during 2004-05 compared to 1989-90. This sector's percentage of variation in it's GSDP contribution in proportion to total decreased from 11.23% during 1997-98 compared to 1989-90 to 4.81% during 2004-05 compared to 1997-98. Trade, Hotels & Restaurants: It's contribution to GSDP in proportion to total has increased by a minimum of 0.16% during 1997-98 compared to 1989-90 and appreciably by 14.26% during 2004-05 compared to 1997-98.

Trade, Hotels & Restaurants- concluded The percentage of variation in number of establishments in proportion to total is -7.1% during 1997-98 compared to 1989-90 and -11.69% during 2004-05 compared to 1997-98. The percentage of variation in employment in proportion to total is 19% during 1997-98 compared to 1989-90 and -8.08% during 2004-05 compared to 1997-98. Trade, Hotels and restaurants put together contribute 37.68%, 38.11% and 36.26% to total establishments in 1989-90, 1997-98 and 2004-05 respectively. It is 24.37%, 28.20% and 27.28% in employment. In GSDP its contribution is only 12.39%, 12.41% and 14.18% in 1989-90, 1997-98 and 2004-05 respectively. Financial policy of the banks would have influenced these sectors. Cut in interest rates, easy availability of loans are the important factors influencing the increase rate.

STATISTICAL ANALYSIS: It is said in all Economic Censuses that it contribute significantly to National Income/GSDP here an attempt is made to statistically analyze the same by deriving the correlation coefficient. (i) Correlation between Establishment and Employment Year 1990 1998 2005 Value of (r) 0.91 0.95 0.94

The Karl-Pearson correlation co-efficient (r) between the number of establishments and the number of employment in nearly perfect during all the 3 censuses. Thus it proves that employment and establishments are correlated to each other.

(ii) Correlation between Establishment and GSDP On the other hand there exists a weak correlation between the number of establishments and the GSDP during earlier two censuses.

Year 1990 1998 2005

Value of (r) 0.35 0.48 0.59

(iii) Correlation between Employment and GSDP

Year 1990 1998 2005

Value of (r) 0.44 0.57 0.64

There exists a good correlation between the number of employment and the GSDP during last two censuses. The general opinion is that either employees or establishment is highly correlated with GSDP as both are expected to influence the state income, it is observed more so in employment.

Correlation Coefficient : Districts & EC-2005

Sl. No 1 2 3 4 5 6 7 8 9 10 Districts Bagalkote Bangalore U Bangalore R Belgaum Bellary Bidar Bijapur Chamrajnagar Chikmagalur Chitradurga No. of Establish ments 67613 295728 114715 204610 88699 49807 56045 42850 56930 72144 No. of Employment 155668 1247713 295518 442325 211293 101841 115723 81482 136106 148822 GSDP 338115 4583558 586059 924390 717745 236662 312766 166052 368413 287049

Sl. No 11 12 13 14 15 16 17 18 19 20

Districts Dakshina Kannada Davangere Dharwad Gadag Gulbarga Hassan Haveri Kodagu Kolar Koppal

No. of No. of Establish Employm ments ent 203334 62239 61935 44505 91417 88225 54874 17178 138428 40473 352093 124653 170895 98872 192101 201449 109617 42785 348056 90013

GSDP 885484 419287 427339 197101 599053 342871 280694 228808 510674 283856

Sl. No 21 22 23 24 25 26 27

Districts Mandya Mysore Raichur Shimoga Tumkur Udupi Uttar Kannada Total

No. of No. of Establishm Employ ents ment 104333 222001 165913 536982 53245 116015 78381 210446 141940 289934 87018 174602 56295 128581 2538874 6345586

GSDP 341144 757557 281862 403565 489526 335515 316573 15621718

Correlation Coefficient between Establishment and Employment = 0.91 Correlation Coefficient between Establishment and GSDP = 0.79 Correlation Coefficient between Employment and GSDP = 0.94

SUGGESTIONS FOR IMPROVEMENT:1. In future Economic Censuses, production and value of turn over are to be included. 2. A methodology may be developed based on taxation and administrative data combined with sample survey to arrive at intermediate years statistics. 3. The UFS block maps should be updated by the NSSO well-inadvance before the commencement of field work. 4. The 6th Economic Census should be planned in such a way that the field work of population census and Economic Census should go simultaneously. 5. Information regarding name and address slips of the enterprises having less than 10 employees has to be to collected and published since this segment constitutes 68% of the total establishments.

SUGGESTIONS FOR IMPROVEMENT:-concluded

6. Intensive training regarding concept and definitions, to identify the respondents, activities and enterprises, has to be imparted to the primary workers before they go for field work. 7. A methodology and software has to be evolved to study the trend of different industries across the censuses. 8. A reputed Agency should be entrusted for conducting Economic Census to get qualitative and timely data. So that the results of the Economic Census can be published within a year since its commencement. 9. To estimate GSDP at block level, Economic Census data may be used as auxilary variable.

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