India to have annual survey of services

For the first time, there will be an official detailed data on the services sector. Unlike Annual Survey of Industries (ASI), India does not have comprehensive data on services, despite the tertiary sector contributing more than 60 per cent of its GDP.

In an effort to track services, Ministry of Statistics and Programme Implementation (MoSPI) will be out with Annual Survey of Services (ASS) for 2013-14 on the lines of ASI. Considering ASI data are available with a lag of two years, the ASS data for 2013-14 will be available some time in 2016, a MoSPI official said.

ASS frame has been finalized and pilot testing will begin by the end of this year in six states, mainly in the north-east.

The survey will be done by the National Sample Survey Organisation (NSSO).

“We are ready with the basic framework, and will run the pilot by the year end’, said a Mospi official. “We are planning to come out with the first Annual Survey of Services for 2013-14”, he added.

This will be the first official attempt to collect and release services data, which is quite a challenge for the country considering the big unorganized sector.  Also composition of units in the domain undergoes changes at a rapid pace because new units or newer service areas come into existence and others disappear with alarming frequency.

Data from the organized sector is not much of a problem since the financial reports and accounts from the companies can give estimates, the MoSPI official said.

The ASI extends to the entire country. It covers all factories,  employing 10 or more workers using power; and those employing 20 or more workers without using power.

The planned ASS will be on lines of ASI. As such it would also use data from units using power and employing 10 or more workers and units not using power and having more than 20 workers.

The ASI also covers bidi and cigar manufacturing establishments registered under the Bidi & Cigar Workers (Conditions of Employment) Act, 1966.  Certain servicing units and activities like water supply, cold storage, repairing of motor vehicles and other consumer durables like watches etc. are covered under ASI.

Though servicing industries like motion picture production, personal services like laundry services, job dyeing, are covered under ASI but data are not tabulated, as these industries do not fall under the scope of industrial sector defined by the United Nations.

Defence establishments, oil storage and distribution depots, restaurants, hotels, café and computer services and the technical training institutes, etc. are excluded from the purview of ASI. ASS may attempt to cover all the excluded services from ASI.

ASS will be based on the 2012 economic census. The 2012 economic census will create a comprehensive database of the economic profile of India's households and businesses. The economic census will provide basic data on the number of enterprises and people employed in them. The economic census is being designed to create National Business Register, that will capture all business establishments with a workforce of 10 or more people. It will have details like sectors, turnovers, number of the people employed etc. The ambit of the census has been broadened to cover services sector, mom & pop stores and businesses run from home.

It is likely to cover about 24 crore households and between 4 crore and 5.2 crore enterprises.

This is the sixth economic census, being conducted by the Central Statistics Office since 1977. Since then, it has conducted economic censuses in 1980, 1990, 1998 and 2005.

Meanwhile, there is also no separate index to calculate growth in tertiary sector output, while that on industrial production comes every month. To fill this void, the government has already begun a process of coming out with the data on, to begin with, rail and air traffic.

The ministry of statistics and programme implementation has already sought feedback on its methodology for calculating the new Index of Services Production (ISP) on these two segments.

The other services sectors such as postal, telecommunication and banking would be included in the index in a phased manner.

Currently, HSBC purchasing managers' index (PMI) somewhat captures services growth in India. But it only gives a broad indicator to services growth month-on-month on the basis of a survey of some 500 private sector firms. However, experts said it would take a long while for India to come out with an index for services production. A note brought out by the ministry also said a major limitation of the existing statistical system on services is the absence of an organised mechanism for maintaining a regular database for this sector.

“Unlike the Annual Survey of Industries that is devoted to collection of data from manufacturing and a few other categories of units included in the lists maintained by the Chief Inspectors of Factories, there is no such scheme in the services sector for annual collection of data from the units,” an official statement had said earlier.

As such, the planned Annual Survey of Services will go a long way to help come out with monthly index of services production, but for that one has to wait till 2016.