Value Addition & Employment Generation in

Transcription

1 Value Addition & Employment Generation in the ICT Sector in India Government of India Ministry of Statistics & Programme Implementation National Statistical Organisation Central Statistics Office

2 CONTENTS Sl. Page No. Chapter Description No. 1. Preface (i) 2. Team of Officers (ii) 3. Highlights 1 4. Introduction 2 5. Definition of ICT Sector, its Scope and 6 Coverage 6. Sources of the data Gross Domestic Product of ICT Sector Growth and Employment in ICT Manufacturing Industries 9. Growth and Employment in ICT Services Industries Annexures Annex I: Definitions 22 Annex II: Sampling Design of ASI 23 Annex III: Sub-sector-wise Gross Value Added in organised ICT manufacturing sector Annex IV: Sub-sector-wise person engaged in organised manufacturing sector

3 PREFACE The Central Statistics Office (CSO) in the Ministry of Statistics & Programme Implementation (MOSPI), a nodal statistical agency of the Government of India, is responsible for standardization and co-ordination of statistical activities at the national level and for statistical co-operation with the International Statistical Organizations. It also compiles and publishes statistics on emerging and critical areas to cater to the needs for national planning and policy making, besides a set ofcore statistics. The Information and Communication Technology (lct) is an important emerging sector of contemporary India. Its contribution to Indian economy and society is quite significant. However, scientific collection and compilation of ICT statistics is yet to be developed in the country for meeting the requirements ofdevelopment planning. This is the state of affairs in most ofthe developing countries in the world. To fill this data gap lot of efforts are being made at the international level. One such effort is the project on "Statistical Compilation of ICT Sector and Policy Analysis" undertaken by Orbicom, the network of UNESCO Chairs in Communication. Orbicom is recognized in the international community for research on issues related to the digital divide, the gender divide, the making of information societies and ICT markets. Govt. of India, MOSPI has signed an MOU to participate in this project. Quantification of the ICT sector has produced valuable insights in developed countries. Examples include work at the OECD and several developed countries, which provided detailed statistics and policy-relevant analysis. However, the systematic quantification of the ICT sector has not been attempted for countries like India. The main objective of the project is to encourage developing countries like India to generate good quality official ICT statistics. In this project an attempt has been made to compile data on the contribution ofict sector to the Gross Domestic Product (GDP) and employment to the Indian economy following internationally accepted and harmonized definitions and concepts emerging form the OECD and United Nations. The data have been compiled from the existing data holdings ofthe MOSPI. Since the ICT sector spreads over both organized and unorganized segments of manufacturing and services sectors, the data included in this booklet have been compiled from the Annual Survey of Industries for organized manufacturing sector and the enterprise surveys conducted by the National Sample Survey Office (NSSO) for services provided by the ICT. The ICT sector I sub-sectors as classified under ISIC Version 4.0 and the corresponding derived National Industrial Classification 2008 (NIC-2008) have been used for compilation of the data. Since no systematic effort was made in the previous years for collection and compilation of ICT sector statistics, only a limited amount of data that was available could be compiled from the existing sources. Efforts are being made in the coming surveys to fill this data gap. We look forward to the suggestions for improvement in the scope, coverage and quality ofthe data ofthe present publication. New Delhi April 2010 ~~ (S.K.DAS) DIRECTOR GENERAL (CSO)

4 TEAM OF OFFICERS (associated with the project) ******** 1. Shri Vijay Kumar, the then ADG, CSO, MOS&PI 2. Shri Ashish Kumar, ADG, CSO, MOS&PI 3. Shri D. Sahoo, DDG, CSO, MOS&PI 4. Smt. G.S. Lakshmi, DDG, CSO, MOS&PI 5. Smt. Payal Malik, Lecturer, Delhi University 6. Shri Ram Rao Mundhe, Research Assistant ********************* ii

5 HIGHLIGHTS The objective of the project is to compile Gross Value Added and Employment for the ICT sector. The definition and scope of ICT sector as recommended by UNSD have been adopted for the compilation. Gross Value added and number of persons engaged in organised Manufacturing sector are available only from Annual Survey of Industries (ASI). Estimated GVA and employment for ICT services sector are available only for from the report Service Sector in India ( ) - NSS 63 rd Round. Estimated GDP (at 2-digit level of NIC) for total ICT has increased from Rs. 656 billion in to Rs billion in with CAGR of 21.3%. Estimated share (at 2-digit level of NIC) of ICT services to total ICT GDP is about 90% and that of ICT manufacturing sector to total ICT GDP is about 10%. Estimated share (at 2-digit level of NIC) of ICT services GDP to Service sector GDP has increased from 6% in to 10% in Estimated share of ICT services to total GDP has increased from 3% in to 6% in x 1

6 CHAPTER 1 INTRODUCTION 1.1 Importance of the ICT It is an accepted fact that the most important scientific and technological development of contemporary history is Information and Communication Technology (ICT). ICT has pervaded all walks of modern life and society so profoundly that the modern society is colloquially known as Information Society. It has revolutionised the development process itself by influencing its manifold dimensions be it economic, social, political, cultural, environmental, ethical, behavioural, etc. The contribution of ICT to Gross Domestic Product (GDP), employment generation, market diversification, operation of free markets, foreign exchange earnings, poverty reduction, environmental development, economic globalization and liberalization, women s empowerment and gender equity are testimonies to what extent it influences the economy. In the political/administrative front, ICT facilitates through e-governance, the promotion of responsive, accountable, corruption-less & effective government and administration and increases awareness about the rights and the duties of both the government and citizens. It fosters socio-cultural development and the concept of global village & borderless society by enhancing the promotion of social cohesion, harmony and integration, spread of education and knowledge through distance learning in cost effective manner. The degree of contribution of the ICT to economies and societies vary according to their stage of development (developed, developing or underdeveloped), nature of political economy, availability of appropriate complementary infrastructure, etc. Irrespective of these inherent differentials, ICT is catalysing the process of change in a manner which reduces the socio-economic and political inequalities between rich and poor, educated and uneducated, rural and urban, and men and women across all countries. 1.2 The ICT in the Indian economy In delineating the significance of the ICT in the Indian economy, it is essential to clarify, what ICT sector consists of in the Indian context. It needs to be noted that the ICT is not an individual item like the internet or computers, or 2

7 telecommunications but it is a convergence of different electronic tools that facilitate the functions of information processing and communication, including transmission and display. Since no systematic and scientific data based on harmonised concepts, definitions and classifications has been developed in India pertaining to the ICT sector, most of the available data are official by-products originating from different functional ministries/departments, business associations, research institutions and NGOs. The Department of IT, Ministry of Communication and IT, compiles and publishes data under two broad headings viz. Electronics Hardware and Computer software. The trends in production and growth rates of the Indian Electronics and IT/IT enabled Services (ITeS) industry since are given in Table 1.1. It is observed that ICT sector as captured by this data is a fast growing sector of Indian industry with a recorded production of Rs billion during the year , which is estimated to reach Rs billion during the year , recording a growth of more than three times during the last five years. Further the ICT industry during the period from to has shown sustained growth. However, the annual growth rates during this period have shown fluctuations. While the growth rate during was 28.3%, it declined to 21.2% during and again bounced back to 24.5% during Table 1.1 Trend in production and growth of the Hardware and Computer Software Sector Year Production (Rs. Billion) Growth Electronic hardware Computer software Total (% increase over previous year) Source: Department of IT, Ministry of Communication and IT Electronics Hardware production increased from Rs.438 billion in to an estimated Rs billion in , with a compound annual growth rate (CAGR) of 16.6%. However, the annual growth rate in the production of electronics hardware was only 12.1%, during over According to the Ministry 3

8 of IT, the hardware production in India constituted around 1.5% of global electronics production during the year The Computer Software industry which was worth Rs billion in is estimated to achieve a production of Rs billion during the year Software exports have become an important part of India s exports. Indian Software exports have risen from US$ 17.7 billion in to an estimated figure of US$ 46.3 billion in (Table 1.2). This success in software has been built on the foundations of public investments in human capital, outward orientation in policies, and a highly competitive private sector industry. Table 1.2 Growth of Exports in IT-ITES/BPO sector Sl.No. Year Exports (in US$ billion) Growth (%) Source: The Ministry of Communication and Information Technology So far several statistics have been produced, as above, but such statistics are not necessarily in alignment with any international classification system. For instance, while production data is available there is no value added (GDP) data yet officially available. Most of the studies on Indian IT industry rely on NASSCOM data, which does not reveal firm level information. Moreover, NASSCOM data is not official data and does not follow any classification system. For instance, while reporting IT data they club IT with the BPO industry also known as ITES (IT enabled services). However, this data does not represent ICT sector in the strictest sense as defined internationally. Given the limitation of the existing data sources on India s ICT sector in this endeavour MoSPI attempts to formally present systematic and internationally comparable data on the ICT sector from the extant official data. There is a great need to understand the nature of Indian IT industry, IT use and its impact. Modifications in the extant system of statistical collection can address this 4

9 concern and will help in cross comparison across the regions & industry domains within the country, and across globe. This project is an attempt to address some of these lacunae. x 5

10 CHAPTER 2 DEFINITION OF ICT SECTOR, ITS SCOPE & COVERAGE In view of the crucial role played by the ICT sector in the economy there is a great demand for quality ICT statistics by planners and policy makers for informed decision making. However, scientific generation of ICT statistics is lacking in most countries, particularly the developing countries including India. Because of the overwhelming presence of the ICT in various economic activities, it is difficult to prepare activity and product classification for the sector. Considerable amount of discussion and debate has taken place in various international fora to devise standard and harmonised concepts and definitions and to create the activity and product classification to adequately capture this sector. The Organisation for Economic Cooperation Development (OECD) has taken a leading role in standardising the definition of the ICT sector, which provides a statistical basis for measurement of ICT in an internationally comparable manner. The United Nations Statistics Division has accepted the OECD definitions for their adoption by member countries. The following general principle has been adopted to identify ICT economic activities/industries. The production (goods and services) of a candidate industry must primarily be intended to fulfil or enable the function of information processing and communication by electronic means, including transmission and display. The activities (industries) in the ICT sector can be grouped into ICT manufacturing industries, ICT trade industries and ICT services industries. Industries in ISIC Rev.4.0 that comply with the above definition are provided below in Table

11 Table 2.1 ICT Sector Industries Sr. No. *ISIC code Description ICT manufacturing industries Manufacture of electronic components Manufacture of computers and peripheral equipment Manufacture of communication equipment Manufacture of consumer electronic Manufacture of Magnetic & optical media ICT trade industries Wholesale of computers, computer peripheral equipment & Wholesale of electronic & telecommunication equipment ICT services industries A 61 Telecommunications Wired telecommunications activities Wireless telecommunications activities Satellite telecommunications activities Other telecommunications activities B 62 Information technology service activities Computer programming activities Information technology consultancy activities & computer Other information technology service activities C 631 Web portals, data processing, hosting and related activities Data processing, hosting and related activities Web portals D 951 Repair of computers & communication equipment Repair of computers & peripheral equipment Repair of communication equipment *International Standard Industrial Classification (ISIC) Rev. 4.0 released in

12 The National Industrial Classification 2008 (NIC 2008) has adopted this classification in totality up to 4-digit level and it has been expanded to 5-digit level to capture more disaggregated economic activities for use in national planning and policy making. The NIC 2008 is a derived National Industrial Classification of all economic activities of the Indian economy based on the International Standard Industrial Classification (ISIC) of all economic activities Version 4.0.(ISIC Ver 4.0) As mentioned earlier, current ICT statistics in India are not based on any harmonised concepts, definitions and classifications. Data available are official byproducts or generated by business associations, NGOs and research institutions for their specific uses adopting concepts, methodologies and classification, which may not be according to the international standards. Thus, in the absence of harmonised concepts and definitions for generating the ICT indicators, which are required for planning, monitoring and evaluation, a limited number of penetration indicators, particularly from telecommunication viz. tele-density, have been used to measure the growth of the ICT sector. Prominent among these parameters include: number of telephone connections (both mobile & landlines) per thousand population, percentage of geographical area having telecommunication facilities, percentage of population with telecommunication facilities, etc. National policies and business strategies are so far being developed only with these indicators. Though these indicators have been valuable in guiding national policies, holistic and in-depth economic analysis require other indicators pertaining to value addition, employment generation, trade, etc. for assessment of the impact of the ICT revolution on the economy and society. The compilation and publication of this booklet is modest attempt to fill the existing data gaps. The two most important ICT indicators from policy perspective are Gross Value Added (GVA) or Net Value Added (NVA) and employment with age-sex distribution. Attempt has been made to generate these parameters sectorwise (industry-wise) by using latest National Industrial Classification. Broadly the economic data are classified under two heads viz. Manufacturing Sector (organised and unorganised) and Services Sector (organised and unorganised) giving rise to four categories viz. Organised Manufacturing Sector, Unorganised Manufacturing Sector, Organised Services Sector & Unorganised 8

13 Services Sector. The data sources for these categories are discussed in detail in the next chapter. The definitions of GVA, NVA, Workers, Employees and Persons Engaged as used in the Annual Survey of Industries (ASI) are explained in Annexure I. The break-up of employment according to gender has been presented for Organised Manufacturing sector only, since such break-up is not available for all sectors. x 9

14 CHAPTER 3 SOURCES OF DATA 3.1 The ICT sector, as explained earlier is broadly divided into four sub categories, organised manufacturing, unorganised manufacturing, organised services and unorganised services. Of these four, the data for organised manufacturing sector is obtained from the Annual Survey of Industries (ASI), which is conducted by the Central Statistics Office, M/o Statistics & Programme Implementation. The data of the remaining three sectors are obtained from the enterprise surveys conducted by the National Sample Survey Office, M/o Statistics & Programme Implementation. The details of these surveys are as under. 3.2 Annual Survey of Industries The Annual Survey of Industries (ASI) is the principal source of industrial statistics in India. It provides statistical information to assess and evaluate, objectively and realistically, the changes in the growth, composition and structure of organised manufacturing sector. This covers activities related to manufacturing processes, repair services, gas and water supply and cold storage. The Survey is conducted annually under the statutory provisions of the Collection of Statistics Act 1953, and the Rules framed there-under in 1959, except in the State of Jammu & Kashmir where it is conducted under the State Collection of Statistics Act, 1961 and the rules framed there-under in It covers all factories registered under Sections 2m(i) and 2m(ii) of the Factories Act, 1948 i.e. those factories employing 10 or more workers using power and those employing 20 or more workers without using power. The survey also covers bidi and cigar manufacturing establishments registered under the Bidi & Cigar Workers (Conditions of Employment) Act, Sampling Design of ASI is discussed in Annexure-II rd Round Survey of NSSO. The principal source of Service Sector statistics in India that are compiled following standard statistical classification and methodology, is the National Sample Survey Office (NSSO) which collects data pertaining to Service Sector periodically through the follow up enterprise surveys. The 63 rd round of NSSO (July

15 June 2007) is a comprehensive survey that covered both Organised and Unorganised Enterprises of some selected service industries. Scope & Coverage : The 63 rd round covered broadly service sector enterprises engaged in the activities of hotels and restaurants; transport, storage and communication (Section I); financial intermediation (Section J); real estate, renting and business activities (Section K); education (Section M); health and social work (Section N); and other community, social and personal service activities (Section O). As regards the geographical coverage of the survey, it covered all the states and Union Territories of India, except a few very difficult and inaccessible areas. Sampling design of NSS 63 rd round is discussed in brief in Annexure II. 3.4 NATIONAL ACCOUNTS STATISTICS The annual publication of National Accounts Statistics (NAS) presents the estimates of national/domestic product, consolidated accounts of the nation, private final consumption expenditure, savings, capital formation, public sector transactions and disaggregated statements. This publication also includes Statements on the Revised Advanced Estimates also. A brief analytical write-up, giving an overview of the economy as observed in the NAS, is also included in the publication. The latest available publication is Nation Accounts Statistics NAS-2009 covering the information for the year The publication is available at the link, x 11

16 CHAPTER 4 GROSS DOMESTIC PRODUCT OF ICT SECTOR The Gross Domestic Product (GDP) at current prices in India has gone up to Rs.43, 209 billion in from 192,50 billion in , with compound Annual; Growth Rate (CAGR) of 12.24%. ICT sector GDP has increased to Rs billion in from Rs. 656 billion in with CAGR of 21.3%. Within the composition of ICT sector, the component computer related services grew at a rate of 27.23% per annum during and The growth rate of ICT Manufacturing sector was only 11.4% per annum during the period. The share of ICT services sector to total GDP was as 5.52% during which was only 3.05% during Within services sector - computer and related services segment has grown steadily with its share in total ICT services increased from 46% in to 61% in It is also observed that the share of ICT Manufacturing sector remains more or less constant with about 0.35% during to The most significant feature of the ICT sector is that the share of ICT services sector to the total ICT GDP has been about 90% during to The details of GDP contribution within the ICT sector can be seen from the following Table. Table 4.1 Gross Domestic Product (GDP) of ICT Sector (all figures are in Rs. Billion at current prices unless otherwise mentioned) A. GDP at factor cost (i) computer related Services (in brackets: % of total ICT service) 269(46) 339(47) 414(52) 546(55) 708(57) 918(59) 1178(61) 1452(61) (ii) Communication (in brackets: % of total ICT service) 318(54) 381(53) 376(48) 450(45) 536(43) 630(41) 763(39) 931(39) B. Total ICT services sector GDP (i) + (ii) C. ICT org mfg GVA D. Total ICT Sector GDP (B) + (C) E. Manufacturing sector GDP F. Services sector GDP G. Share of ICT mfg to mfg sector GDP (in %) H. Share of ICT services GDP to Services sector GDP ( %) I. Share of ICT sector to total GDP (in %) J. Share of ICT services to total GDP (in %) K. Share of ICT mfg to total GDP (in %) L. Share of ICT mfg to total ICT GDP (in %) M. Share of ICT services to total ICT GDP (in %) Source: National Accounts Statistics (NAS), India, and x CHAPTER 5 12

17 GROWTH AND EMPLOYMENT IN ICT MANUFACTURING INDUSTRIES The total manufacturing sector comprises the Registered (Organized) and unregistered (Unorganized) units. While the former is covered under the Annual Survey of Industries (ASI), the latter is covered periodically through the enterprise surveys conducted by the NSSO. It is observed from the data generated through the latter that the contribution to Gross Value Added (GVA) and employment of the unorganized manufacturing ICT enterprises are negligible. This chapter is, therefore, devoted to the analysis of trends and patterns in GVA and employment in the organized ICT manufacturing sector. During , organized ICT manufacturing industries contributed about 2% of the total manufacturing sector both GVA and employment The GVA (at current prices) has increased from Rs. 69 billion in to Rs. 148 billion in , with CAGR of 13.41% (Fig. 5.1). Figure 5.1 GVA for organized ICT manufacturing sector Source: Annual Survey of Industries, India, to The GVA (at current prices) per worker was Rs. 236 thousand in , which has increased to Rs. 465 thousand in (Fig. 5.2). 13

18 Figure 5.2 GVA per worker in the organized ICT manufacturing sector GVA per worker in Rs. ' Source: Annual Survey of Industries, India, to A sub-sector-wise analysis of the ICT sector industries reveals that the maximum share (about 30%) comes from the subsector Manufacture of magnetic and optical media (2680 of NIC 2008) to total ICT GVA and the minimum share (about 10%) is contributed by the subsector Manufacture of communication equipments (2630 of NIC 2008). This pattern is consistent during to except for the last two years viz and in which the minimum share corresponds to sub sectors manufacture of consumer electronics (13.17%) and manufacture of computers and peripheral equipments (14.15%) (Table 5.1). As for employment (number of persons engaged in ICT manufacturing sector) the sub-sector Manufacture of magnetic and optical media (2680 of NIC 2008 ) has maximum share about 50%, while the minimum share (ranging from 6% to 9%) is from the subsector Manufacture of computers and peripheral equipments (2620 of NIC 2008). This pattern has been persistent except for and (Table 5.2). Table 5.1 Sub-sector wise percentage distribution of Estimated GVA in Organised ICT 14

19 Manufacturing industries NIC code Description Manufacture of electronic components 2620 Manufacture of computers and peripheral equipments 2630 Manufacture of communication equipments 2640 Manufacture of consumer electronics Manufacture of magnetic & optical media Total Source: Annual Survey of Industries, India, to Table 5.2 Sub-sector wise percentage distribution of Estimated Persons engaged in Organised ICT Manufacturing Industries NIC code Description Manufacture of electronic components Manufacture of computers and peripheral equipments Manufacture of communication equipments Manufacture of consumer electronics Manufacture of magnetic & optical media Total Source: Annual Survey of Industries, India, to Gender distribution of ICT Sector employment 15

20 Generally it is observed that most of the technology oriented industries are not gender-neutral. Absorption of men workers is often higher than those of women workers in most of the technology oriented industries. It is generally believed that ICT industries are less gender sensitive than most other industries. This phenomenon has been investigated empirically for the organised ICT manufacturing sector on the basis of ASI data. It is observed that the share of women workers is higher than the men workers only in the sub sector Manufacture of magnetic and optical media, where as it is lower in the remaining sub-sectors. The minimum share of women workers is observed in the category Manufacture of computers and peripheral equipments, ranging from 0.9 % in to 1.3 % in , and the maximum share of women workers in the category Manufacture of magnetic and optical media, ranging from 33.4% in to 32.3% in This pattern is persistent over the study period to (Table 5.3). 16

21 Table 5.3: Gender-wise percentage distribution of estimated workers in organized ICT manufacturing industries NIC Code Activity Manufacture of electronic components Manufacture of computers and peripheral equipments Manufacture of communication equipment Manufacture of consumer electronics Manufacture of Magnetic and optical media M F T M F T M F T M F T M F T M F T M F T M F T Total Source: Annual Survey of Industries, India, to

22 17

23 The total number of workers, men and women, in the ICT organised manufacturing sector by sub-sectors is depicted in Fig It is observed that men workers are more than the women workers over all the years. Figure 5.3 Number of persons engaged in ICT manufacturing sector gender wise (in 000) Source: Annual Survey of Industries, India, to x 18

24 CHAPTER 6 GROWTH AND EMPLOYMENT IN ICT SERVICE INDUSTRIES As per the results of 63 rd round of NSSO conducted for the services sector during the sub-sector Telecommunications contributed the maximum share, (80%) in terms of Workforce, whereas it contributed only 15% to the GVA (at current prices). On the contrary, the sub sector Computer programming activities contributed about 80% in terms of GVA, whereas its share in work force was only about 16%. The share of different sub sectors among the ICT industries is shown in the table 6.1 and depicted in figures 6.1 and 6.2 below. Table 6.1 Estimated GVA and Employment in ICT services sector during NIC 2004 NIC 2008 ICT Activity Description GVA Employment Rs. million % of Total In numbers % of Total * Telecommunications Software publishing Computer programming activities Computer consultancy and computer facilities management activities Other information technology and computer service activities Data processing, hosting and related activities Web portals ) Repair of computers and peripheral equipment Total ICT services industries Source: National Sample Survey Office (NSSO), India, 63rd round ( ). *includes

25 Figure 6.1 Distribution of GVA of ICT service industries % 3% Telecommunications Computer programming activities 16% Software publishing Others 1% Source: National Sample Survey Organisation (NSSO), India, 63rd round ( ). Figure 6.2 Distribution of workforce of ICT service industries % 3% 16% 1% Telecommunications Computer programming activities Software publishing Others Source: National Sample Survey Office (NSSO), India, 63rd round ( ). While it may seem that this data is counterintuitive given the data presented in Table 5.1 above, there are some caveats to be added here. First, the data 20

26 presented in Table 5.1 on ICT services is from the National Account Statistics and the communications sector there may be over estimated in so far as that it includes postal and courier services as well. However, the general trend of a greater proportion of the ICT sector being computer and computer related activities is seen in both data sources. Secondly, the data in this NSSO round on services did not have government enterprises in its ambit, so while this may not have affected the data on computer and computer related activities, the data on telecommunications may be a bit understated as the government telephone companies have not been covered in the 63 rd round. Last, given that the ICT services sector contribution to the ICT sector is so significant and the existing data so scarce, attempts are being made to officially collect this data. x 21

27 Annexure-I Definitions Gross Value Added (GVA) GVA is derived by deducting total Value of input from total Value of output. Total value of output and input are defined as follows: Total Value of Inputs: Total value of inputs for a factory comprises: (i) Total value of fuels and materials consumed and (ii) Expenditure incurred on the following items: (a) Cost of contract and commission work done by others on material supplied; (b) Cost of material consumed for repair and maintenance work done by others on factory s fixed assets; (c) Postage, telephone and telex; (d) Insurance and banking charges; (e) Cost of printing and stationary. (iii) Purchase value of goods sold in the same condition as purchased. Rent and interest paid by the production unit are not included. Total Value of Outputs: Total value of outputs for a factory comprises: (i) Total ex-factory value of products and by-products manufactured. (ii) Receipts from non-industrial services rendered to others (iii) Receipts from work done for others on material supplied by them. (iv) Value of electricity produced and sold. (v) Sale value of goods sold in the same condition as purchased. (vi) Value of addition in stock of semi-finished goods (vii) Value of own construction. Rent and interest received by the production unit are not included. 22

28 Workers Workers are defined to include all persons employed directly or through any agency whether for wages or not and engaged in any manufacturing process or in cleaning any part of the 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 the manufacturing process. Labour engaged in the repair and maintenance or production of fixed assets for factory s own use or labour employed for generating electricity or producing coal, gas etc. are included. Employees Employees include all workers defined above and persons receiving wages and holding supervisory or managerial positions engaged in administrative office, store keeping section and welfare section, sales department as also those engaged in purchase of raw materials etc. or purchase of fixed assets for the factory and watch & ward staff. Persons Engaged Include the employees as defined above and all working proprietors and their family members who are actively engaged in the work of the factory even without any pay and the unpaid members of the co-operative societies who worked in or for the factory in any direct and productive capacity. The number of workers or employees is an average number obtained by dividing man days worked by the number of days the factory had worked during the reference year x

29 Annexure-II Sampling Design of ASI The Annual Survey of Industries (ASI) is a combination of both complete enumeration and sample survey. A part of the study units is covered on complete enumeration basis (Census Sector), while the remaining units are covered on sample basis (sample sector). The study unit in ASI is a factory in case of manufacturing industries, a workshop in case of repair services, an undertaking or a licensee in case of electricity, gas and water supply and an establishment in the case of bidi and cigar industries. The Census sector comprises:- (i) Units employing 100 workers or more; (ii) Units in the industrially less developed states having few industries; (iii) All units covered under joint returns; and (iv) Each Stratum having less than 6 units. The strata are formed in each state according to the industries under 4 digit National Industrial Classification Codes. A Stratified sampling design is adopted in case of sample sector units. At least 6 units are selected from each stratum in the form of two equal interpenetrating sub-samples independently, applying circular systematic sampling. In case the number of units in a particular stratum is less than or equal to 6, these are fully covered. A sample size of approximately 20% of sample sector units is covered every year by this method, with slight variations in sample size across states, keeping in view the reliability of the state level estimates, the availability of resources and the constraint of over-all sample size at the all India level. The industry-wise, state-wise, industry division-wise, etc. estimates are compiled by applying appropriate multipliers. Sample Design of NSS 63 rd Round The broad sample design followed in the earlier rounds of NSSO is a stratified multi-stage sampling based on the use of area-frame for selection of sample units. The 63 rd round for the first time used a combination of complete enumeration and 24

30 sample survey and also a combination of List Frame and Area Frame for sample selection. In view of large contribution to GDP of the larger Service enterprises and the instability of the state level estimates arising out of sampling fluctuations i.e. inclusion/exclusion of the large service enterprises in the sample, it was decided to use a List Frame of large service sector enterprises to select the study units and survey these on complete enumeration basis. A list of 998 big service sector enterprises spread across all over India was prepared for survey. The list frame covered both financial and non-financial service sector enterprises. However, out of these 998 list frame units, only 438 units could ultimately be identified/surveyed. For the smaller units the Area Frame was used for sample selection. A stratified multi-stage sampling design was adopted. The First-stage Units (FSUs) were villages in rural areas and Urban Frame Survey (UFS) blocks in urban areas. The ultimate stage units were Service sector enterprises in both Urban & Rural areas. Very large villages/towns, UFS blocks were divided into hamlet groups (hg)/subblocks (sb), which formed the intermediate stage units for the selection of hgs/sbs from each FSU. Design based estimates of selected survey characteristics were obtained separately for List Frame and Area Frame. Finally these two sets of estimates were combined to get the pooled estimates for the combined frame at various levels x

31 Annexure-III Sub-sector-wise Gross Value Added in organised ICT manufacturing sector (in million Rs.) Source: Annual survey of Industries. NIC Code Description Manufacture of electronic components Manufacture of computers and peripheral equipments Manufacture of communication equipments Manufacture of consumer electronics Manufacture of magnetic & optical media Total ICT sector x

32 Annexure-IV Sub-sector-wise persons engaged in organised ICT manufacturing sector (in thousands) NIC code Description Manufacture of electronic components Manufacture of computers and peripheral equipments Manufacture of communication equipments Manufacture of consumer electronics Manufacture of consumer electronics Total ICT sector Source: Annual survey of Industries x