New-age reality check: NSO set to reboot industrial activity codes

MoSPI drafts NIC-2025 to classify emerging activities from ashwagandha farming to drone toys and digital tutoring, aligning with UN ISIC standards

Nail salons, dating services (online and offline), slandering salons, temporary tattoo art, organising of bachelor and bachellorrette parties; raising of equines like ponies, donkeys and mules; growing opium, Ashwagandha, Isabgol and Christmas trees — these wide range of services and occupations are some of the new activities that India’s official statistical machinery will capture under a proposed new National Industrial Classification (NIC) framework. 

Being revised for the first time since 2008, NIC defines different economic activities at a granular level so that their output is added up to arrive at the country’s gross domestic product, and factors in the broad shifts in the nature of enterprise undertaken across sectors in recent times. 

The last time there was such a long gap in revising the NIC — a set of five digit codes assigned to different activities — was between 1970 and 1987. But with the pace of socio-economic change accelerating in recent years, the magnitude of the revision being undertaken this time is significantly wider. 

Thus, the growing of grapes would now factor in that some grapes are made for wines, and wines too have a new distinction for the sparkling variety, according to the proposed new NIC 2025 – being formulated by the National Statistics Office (NSO).

 

Even the broad classification of alcohol manufacturing is now proposed to be broken up into various sub-classifications such as vodka, rum, brandy, gin and whisky.  

 

In keeping with the times, installation of electric chargers for electric vehicles and solar systems on buildings have been introduced as new activities along with operation of online food delivery platforms, while trading in radios and CD/DVD players has been swapped by webcams, projection screens and streaming equipment. The closest reference to a transistor in the new framework is as an electronic component in connection with semiconductor devices, while video tape distribution has been replaced by OTT platform streaming services.   

 

Similarly, academic tutoring services is proposed to be expanded to include digital tutorials as well, while professional examination review courses are being spliced into separate categories for prep course for entrance examinations like the IIT-JEE and prep courses for job entry exams such as the UPSC and Bank PO.

 

These changes, for which the NSO has sought comments from stakeholders, will help policymakers in better understanding of the country’s economic activities and help design more efficient policy interventions. For instance, segregated data about crops like tomato, cauliflower, brinjal and garlic, will help governments devise better anti-inflationary measures than a generic data set about vegetables production.

 

PC Mohanan, former acting chairman, National Statistical Commission, said the exercise will help better capture the new emerging industries and services as well as the changing nature of economic activities in the country due to the structural changes in the past decade or so. It is expected that a lot of new age activities will be added up in the services sector this time.

 

“These codes serve as a foundational tool utilized across multiple domains, including statistical surveys like annual survey of industries, ministry of corporate affairs database, informal sector surveys, economic census, economic research, registration processes, and policy formulation by central and state government agencies as well as private sector stakeholders. These codes are what makes the basis of the calculation of the national accounts data as well,” he added. 

 

These proposed overhaul of the NIC codes is in line with the recently updated International Standard Industrial Classification of All Economic Activities (ISIC Revision 5) developed by the United Nations Statistics Division, aimed at facilitating better international and interregional comparability of economic data, and supporting more robust economic analysis and policy-making. 

 

The first such classification of economic activities in the country was prepared in 1962, with updates and revisions made in 1970, 1987, 1998, 2004 and 2008. The NIC code is a standardized numerical system developed by the statistics ministry to classify and categorize various economic activities and it serves as a foundational tool for organizing data related to industries and businesses across the country. For example, code 01111 pertains to growing of wheat and the code 01112 pertains to growing of jowar, bajra and millets. 

 

However, Ashish Kumar, distinguished fellow at Pahle India Foundation, cautioned that the current exercise must ensure there is a concordance between the earlier codes and the new ones, so that it doesn’t pose a challenge for analysing longer term trends. “Moreover, the new series should include all the economic activities on the horizon like gig and platform work, digital technology, artificial intelligence, thus anticipating changes in the nature of work for the next decade or so,” he pointed out.

 

To be sure, the computer programming activities category, which earlier had only three classifications such as writing software programs and web-page designing, now clearly outlines new activities that include artificial intelligence and machine learning applications’ development as well as designing cybersecurity and anti-virus programs. 

On the anvil 

Some new activities to be covered in NIC 2025

• OTT platform streaming services  
• Organising bachelor and bachelorette parties
• Growing aswagandha, isabgol & christmas trees
• Dating services (online & offline)
• Operation of online food delivery platforms
• Artificial intelligence and machine learning applications’ development
• Alcohol manufacturing to have sub-classifications like vodka, rum, brandy, gin, and whisky
• Installing electric chargers for EVs