Concepts, Definitions and Methodology for conducting
Third Census

Objectives of Third Census
Coverage of Third Census
Sampling Design for the Sample Survey of Unregistered SSI sector
Formats for Data Collection
Concepts and Definitions
Criteria to identify Sickness/ Incipient Sickness
Programme of Work
General Guidelines for filling the Formats (DOs and DON'Ts)


Objectives of Third Census

    There are three main objectives sought to be achieved through Third Census. The first one is to update the frame of registered SSI units. The updated frame with adequate ancillary information on various classificatory characteristics will help in conducting regular surveys to understand structural changes in the SSI sector, which will lead to policy correctives. Another purpose of the frame is to help in compilation of Index of Industrial Production (IIP) for SSI sector. The second objective of Third Census is to identify sick and incipiently sick units with the reasons and also collect other information useful for policy formulation.

  1. Unregistered SSI sector was not surveyed in the first two Censuses. The Unregistered SSI sector comprises all those units which are eligible to be registered, but are not registered because the registration is voluntary. No database is available at present on this sector. The Economic Censuses conducted by the Central Statistical Organisation so far did not throw any light on this sector. Hence, the third objective emanates from the decision of the Steering Committee to cover the unregistered SSI sector through a Sample Survey in the Third Census.

Coverage of Third Census

  1. The Third Census will cover the registered SSI sector through complete enumeration and the unregistered SSI sector through a sample survey in all the States/ UTs. All the SIDO units permanently registered up to 31-3-2001 will be covered in the registered SSI sector. The SIDO units not registered till 31-3-2001 will constitute the universe for unregistered SSI sector. Thus the Unregistered SSI sector for the purpose of Third Census can be defined as the set of all those units (SSIs, ancillaries & SSSBEs), which are eligible to be registered as on 31-3-2001, but are not permanently registered because the registration is voluntary. This includes those units, which were temporarily registered on or before 31-3-2001provided they were not permanently registered till 31-3-2001. The coverage of both the components together will only give a picture of the total SSI sector. If the two components are surveyed with a common reference period, it will give benchmark estimates on different characteristics of the SSI sector as a whole at different time points. Hence, it has been decided to have the financial year 2001-2002 as the common reference period.

Sampling Design for the Sample Survey of Unregistered SSI sector

  1. A sample size of 2,16,000 units has been fixed for the survey on unregistered SSI sector at all India level, which is expected to estimate the population parameters with a permissible margin of error of 2-3 % with 95 % probability. At State/ UT level, the sample size of 2,16,00 fixed at all India level has been allocated in such a way that the margin of error would be reasonable in all the major States.


  2. A two-stage stratified sampling design is found to be suitable for the survey. The first stage units (FSUs) will be the census villages in rural sector and Urban Frame Survey (UFS) blocks in urban sector. The UFS blocks are compact areal units with distinct boundaries having a population of 600-800 on the average. These are carved out in all the towns by the National Sample Survey Organisation (Field Operations Division). The second stage units (SSUs) are enterprises falling in the unregistered SSI sector.


  3. The data on Economic Census 1998 furnished by the Central Statistical Organisation was used for stratification. From the Economic Census (EC) data, at the first stage the non-agricultural enterprises and establishments having industry codes (as per NIC 87) relevant for SSI sector were extracted and at the second stage units belonging to public sector and those operating without fixed premises were eliminated. The EC data-file after completing these two stages has been used for preparing size-class distribution at State level separately for rural and urban sectors. The size is the number of enterprises and the size classes are 0, 1 to 10, 11 to 50, 51 to 200 and 201 & above. These size classes are termed as Stratum 1, Stratum 2, Stratum 3 Stratum 4 and Stratum 5 respectively. The FSUs falling in Stratum 5 have been earmarked for complete enumeration and the maximum sample size in each FSU (i.e., no. of SSUs) in this size class is fixed at 20. In respect of the other strata, the maximum sample size is fixed at 10. A minimum of 2 FSUs in each stratum (subject to availability) has also been fixed. The total sample size of 2,16,000 has been allocated to the strata based on these considerations and the number of FSUs to be selected in each stratum has also been computed accordingly.


  4. The list of FSUs (villages and urban blocks to be surveyed) in each stratum has been selected circular systematically with equal probability without replacement after arranging the FSUs in the stratum in the descending order of no. of enterprises as found in EC data-file.


  5. In each FSU, after listing the non-agricultural enterprises operating within fixed premises, the units falling in unregistered SSI sector have to be identified through the process of elimination in a phased manner as prescribed in this mannual. These will be separated into two sub-strata, viz., SSIs and SSSBEs. The allocation of total sample size (10 for stratum 1 to 4 and 20 for stratum 5) has to be done proportionately to the two sub-strata, subject to a minimum of 2 in each sub-stratum.

Formats for Data Collection

  1. There are four formats to be used by enumerators for data collection. These are Formats I, III, IV & V. In addition, there is another format, viz., Format II which is, by and large, a summary of Format IV. These formats are given at Annex. Computerised Data Preparation will be done only in respect of Formats I, II & III. However, Formats IV and V will be used for data validation purposes. The list of the formats is given below.

S. No.

Format No.

Description of the format

Remarks

1.

I

Format for complete enumeration of registered SSI units

This will be filled in respect of all the SSIs & SSSBEs registered up to 31-3-2001.

2.

II

Format for summarising the listing of unregistered SSI units

This will give summary information of the unregistered SSI sector, compiled on the basis of entries in Format - IV.

3.

III

Format for the survey of unregistered SSI units

The unregistered SSIs & SSSBEs selected for survey will be known from the entries in Format IV. Data will be collected in this format from the selected units.

4.

IV

Working Sheet for listing of unregistered SSI units operating in a fixed premises

The list of unregistered SSI units will be prepared and the required no. of units will be selected on the basis of methodology prescribed.

5.

V

Working Sheet to calculate gross output and net worth

This will be used for each unit surveyed (both registered and unregistered) to compute gross output and net worth and the values arrived at, will be copied against the respective items in Formats I or III.

Concepts and Definitions

  1. The enumerators have to understand various concepts, which are to be used by them in data collection. Some of the definitions to be used in Third Census are given below.

    Small Scale Industrial Unit (SSI): An industrial undertaking in which the investment in fixed assets in plant and machinery, whether held on ownership terms, or on lease, or by hire purchase, does not exceed Rs. 100 lakhs as on 31-3-2001 is to be treated as a Small Scale Industrial Unit.

    Registered SSIs : All SSIs registered permanently with State Directorates of Industries/ District Industries Centres as on 31-3-2001 are called registered SSIs. Some SSI units were earlier registered when the upper ceiling limit in plant and machinery was Rs. 300 lakhs. These units are also to be treated as registered SSIs.

    Unregistered SSIs : All the SSIs not registered permanently with State Directorates of Industries/ District Industries Centres on or before 31-3-2001 are called unregistered SSIs. SSIs that are temporarily registered on or before 31-3-2001 as also the units that are temporarily or permanently registered after 31-3-2001 till the date of survey will be treated as unregistered SSIs for the purpose of this survey.

    Small Scale Service & Business (industry related) Enterprises (SSSBEs): Industry related service & business related enterprises with investment in fixed assets, excluding land and building, up to Rs. 10 lakhs, irrespective of location as on 31-3-2001 are to be treated as SSSBEs. The illustrative list of services (effective as on 31-3-2001) covered under the definition of SSSBEs is given below.

    • Advertising Agencies
    • Marketing Consultancy
    • Industrial Consultancy
    • Equipment Rental and Leasing
    • Typing Centres
    • Photocopying Centres (Zeroxing)
    • Industrial Photography
    • Industrial R & D Labs.
    • Industrial Testing Labs.
    • Desk Top publishing
    • Internet Browsing/Setting up of Cyber Cafes
    • Auto Repair, services and garages
    • Documentary Films on themes like Family Planning, Social forestry, energy conservation and commercial advertising
    • Laboratories engaged in testing of raw materials, finished products
    • "Servicing Industry" Undertakings engaged in maintenance, repair, testing or electronic/electrical equipment/instruments i.e. measuring/control instruments servicing of all types of vehicles and machinery of any description including televisions, tape recorders, VCRs, Radios, Transformers, Motors, Watches, etc.v
    • Laundry and Dry Cleaning
    • X-Ray Clinic
    • Tailoring
    • Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig, Boring Machines etc.
    • Weigh Bridge
    • Photographic Lab
    • Blue Printing and enlargement of drawing/designs facilities
    • ISD/STD Booths
    • Teleprinter/Fax Services
    • Sub-contracting Exchanges (SCXs) established by Industry Associations.
    • EDP Institutes established by Voluntary Associations/Non-Government Organisations
    • Coloured or Black and White Studios equipped with processing laboratory.
    • Ropeways in hilly areas.
    • Installation and operation of Cable TV Network:
    • Operating EPABX under franchises
    • Beauty Parlours and Creches

    Activities not recognised as SSIs and SSSBEs : The following activities are not recognised as SSIs and SSSBEs.

    • Transportation
    • Storage (except cold storage)
    • Retail/ Wholesale Trade Establishments
    • General Merchandized Stores
    • Sale Outlets for industrial components
    • Health services including pathological laboratories
    • Legal Services
    • Educational Services
    • Social Services
    • Hotels

    Registered SSSBEs : All SSSBEs registered with State Directorates of Industries/ District Industries Centres as on 31-3-2001 are called registered SSSBEs.

    Unregistered SSSBEs : All the SSSBEs not registered permanently with State Directorates of Industries/ District Industries Centres on or before 31-3-2001 are called unregistered SSSBEs.

    Unregistered SSI sector : All the Unregistered SSIs and the Unregistered SSSBEs constitute Unregistered SSI sector. SSIs and SSSBEs that are temporarily registered on or before 31-3-2001 as also the units that are temporarily or permanently registered after 31-3-2001 till the date of survey will be treated as unregistered for the purpose of this survey.

    Ancillary unit: This is a sub-class of SSIs. An industrial undertaking which is engaged or is proposed to be engaged in - (i) the manufacture of parts, components, sub-assemblies, toolings or intermediates; or (ii) rendering of services, or supplying or rendering not less than fifty percent of its production or its total services, as the case may be, to other units for production of other articles and whose investment in fixed assets in plant and machinery, whether held on ownership terms or on lease or on hire purchase, does not exceed Rs. one crore as on 31-3-2001 is to be treated as an ancillary enterprise.

    Gross output : It comprises total ex-factory value of products and by-products manufactured as well as other receipts such as receipts from non-industrial services rendered to others, work done for others on material supplied by them, value of electricity produced and sold, sale value of goods sold in the same condition as purchased, addition in stock of semi-finished goods and own construction.

    Net Worth : The difference of current assets and current liabilities in each year gives net worth for that year.

    Working Unit: An SSI or a SSSBE which has worked at least for one day during the reference period will be treated as a working unit. Otherwise, it will be treated as a closed unit.

    Economic Activity: Any activity resulting in production of goods and services that adds value to national product is considered as Economic Activity. Such activity includes production of all goods and services for market i.e., production for pay or profit and the production of primary commodities for own consumption and own account production of fixed assets, among the non-market activities. The activities like prostitution, begging, smuggling etc. may result in earnings, but will not by convention be considered as economic activities.

    Fixed Assets: Fixed assets are assets held for the purpose of producing or providing goods and services such as land, building, plant & machinery, transport equipments, tools and other assets (new or used) that have a normal economic life of more than one year from the date of acquisition through out-right purchase/ hire purchase/ loans/ mortgage/ construction regardless of their use. They are not held for resale in the normal course of entrepreneurial activities. Full value of assets taken on hire purchase/ installments (whether fully paid or not) excluding interest should be considered. Intangible assets like goodwill etc. are excluded. Advance payment for fixed assets not yet received should not be considered. The information to be recorded here is by physical approach. Fixed assets owned but rented out are not to be accounted for. Additions to the fixed assets during the reference period are to be included. For the unit, which has not yet started providing service and is engaged in the process of installation, fixed assets will be duly considered.

    Plant and Machinery: Plant is generally the name given to an assembly of machinery/ equipment/ devices installed for the operation of entrepreneurial activities. Machinery means an implement or mechanical device used in the entrepreneurial activities.

    Employment: This relates to all persons engaged by the unit whether for wages or not, in the work connected directly or indirectly with the entrepreneurial activity and includes all administrative, technical and clerical staff as also labour in production of capital assets for factory's own use. It also includes all working proprietors and their family members who are actively engaged in the work of the unit even without any pay and the unpaid members of the co-operative societies who work in or for the unit in any direct and productive capacity.

    Outstanding loan: Any borrowing in cash or kind to be repaid is to be treated as loan. The purpose of the loan should be for the use of the enterprise only. Outstanding loan is the amount of loan taken including interest that is outstanding as on the closing day of the reference period. This includes all loans, whether short term or long term, whether interest bearing or not.

    Fixed Premises: Units operating in fixed premises will only be considered prima facie as belonging to SSI sector. The following illustrations will make the concept of fixed premises clear.

    • In a hat (periodical market) there are some permanent structures built by Panchayat or local bodies. The entrepreneurs occupy them on hat days and carry out their activities. These will be considered as activities without fixed premises.
    • The activities carried on by the roadside or in the open public places like that under a bridge or a tree etc., with temporary make shift shelter or no structure at all are deemed to be carried out without fixed premises.
    • The brick kilns, pottery etc., having fixed site (with or without structure) will always be identified at their sites. Hence, these are to be treated as being operated in fixed premises.

    Mixed Activity: There are enterprises, which carry out a number of activities simultaneously. For example, a grocery shop owner may also sell oil from his own ghani, a doctor may have a medical shop attached to his dispensary, a restaurant may run an STD booth in its premises etc. Each of such activity is to be treated as a separate enterprise if information for them is separately available. If the accounts are not separable, then the data will pertain to the enterprise as a whole. The appropriate NIC code in such cases will be determined on the basis of major activity. Major activity refers to the activity, which yields maximum income/ turnover/ employment in that order of preference. In case of mixed activity of manufacturing and trade such as handloom weavers, sweetmeat shops, by convention manufacturing will be taken as the major activity.

    Sickness/ Incipient sickness: The definition of sickness in SSI sector has been changing over time. The RBI have appointed Committees from time to time to look in to this issue. The latest definition given by the Working Group on Rehabilitation of Sick Units set up by RBI (Kohli Committee) is given below.

    "A small scale industrial unit is considered as sick when

    1. if any of the borrowal accounts of the unit remains substandard for more than six months, i.e., principal or interest, in respect of any of its borrowal accounts has remained overdue for a period exceeding one year will remain unchanged even if the present period for classification of an account as substandard is reduced in due course;
    2. OR
    3. There is erosion in the net worth due to accumulated losses to the extent of 50 per cent of its net worth during the previous accounting year, and
    4. The unit has been in commercial production for at least two years."

Criteria to identify sickness/ incipient sickness

  1. In the Third Census, the following criteria will be adapted to identify sick/ incipient sick units.

    1. Continuous decline in gross output compared to the previous two financial years;
    2. Delay in repayment of loan, taken from institutional sources, for more than 12 months; and
    3. Erosion in the net worth to the extent of 50 per cent of the net worth during the previous accounting year.

  2. Units satisfying one or more of the above criteria will have to be treated by the enumerator as not having run satisfactorily and he has to elicit reasons.

Programme of work

  1. Each enumerator may be assigned the survey work in a few registered SSI units and in a few villages/ urban blocks. He has to carefully fill up the prescribed number of Formats. Formats I, II and III will be scanned on computers. Hence, adequate care and attention have to be taken in filling up these formats. The enumerators will submit all the filled-in formats in respect of the work assigned to them to the concerned Data Inspectors. The Data Inspectors will put the codes in respect of economic activity and products/ services. Thereafter, the Supervisors will thoroughly check the entries in Formats I, II & III using Formats IV & V. Separate instructions will be issued indicating the work to be done by the Data Inspectors and Supervisors. All the five filled-in formats in suitable batches should be sent to the designated Centre at New Delhi, immediately after completion of the work. Detailed instructions will be issued separately on the dispatch of filled-in formats.

General Guidelines for filling the formats (DOs and DON'Ts)

  1. Advance technology will be used for scanning the filled-in formats, i.e., Formats I, II and III. Hence, the enumerators have to follow the general guidelines given below while filling up these formats.

    1. Use of blue or black ballpoint pen only should be made for making entries in the formats.
    2. The formats provided for collection of information should not be folded or mutilated in any manner to avoid difficulties at the processing stage.
    3. The entries to be made in words should be made in the formats in CAPITAL LETTERS and in ENGLISH language only. All the entries should be clear and legible.
    4. Entries should be made strictly within the cell boundaries and should not touch the cell boundaries.
    5. There should not be any over-writings.
    6. While entering the numerals in the formats, only the "Arabic Numerals" should be written. Extra care should be taken to write them in the simplest possible manner in order to avoid chances of mistakes at the scanning stage. All the entries in the boxes or columns be made by applying same pressure throughout. No extra decoration should be made while writing the numerals. For example, while writing 'one', a simple vertical line would be sufficient without writing any other line/ curve either on the top or bottom of it. Similarly, while writing the number 'seven', no extra horizontal line should be drawn.
    7. No rough work or stray marks should be made on the formats I to III. Such things can be done on Formats IV & V in the margin.
    8. It is important that survey work in all the units assigned to each enumerator is completed.
    9. The reluctant informants should be assured that the information collected from the unit would be kept confidential. A letter of authority in this regard should be carried without fail and should be shown to the informants, if necessary.
    10. The reference year for the collection of information from the units for the census is financial year 2001-2002, i.e., period from 1-4-2001 to 31-3-2002.
    11. The working sheets (Formats IV & V) have to be submitted by the enumerators along with the other three formats on completion of data collection work.
    12. Major activity codes as per National Industrial Classification for SSI sector and Product codes as per Commodity Classification for SSI sector are to be entered by Data Inspectors only. Enumerators are required to fill the exact descriptions only as mentioned in the books of classification. This is very important to avoid complications at processing stage.
    13. In respect of Formats I, II & III, the original forms supplied by the O/o DC (SSI) only must be used. Photocopies of the forms should not be used under any circumstances. Other papers should not be stapled with the filled-in formats I, II or III. However, in respect of Formats IV & V, no such restrictions need be followed.



Related Links:

Methodology
Highlights of SSI Sector