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Report No. 524(62/2.2/1)

PREFACE

National Sample Survey Organisation (NSSO) conducted an integrated survey of

households and unorganised manufacturing enterprises in the 62nd

round of NSS duringJuly 2005 - June 2006. The subjects covered were household consumer expenditure,

employment and unemployment and unorganised manufacturing enterprises. The present

report is the first one in a series of three reports to be brought out based on the survey on

unorganised manufacturing enterprises. Apart from information on estimated number ofenterprises and number of workers, the report provides the information on operational

characteristics of the enterprises like location of enterprise, maintenance of accounts,number of working hours, nature of operationetc. at all India level for different industry

groups and at the level of states / UTs for all the industry groups taken together.

Chapter One of the report is introductory. Chapter Two deals with concepts and

definitions. Chapter Three of the report gives the summary of the findings. Detailed

tables based on the survey are given in Appendix A. The sample design and estimationprocedure are given in Appendix B. Facsimile of schedule canvassed during the survey is

given in Appendix C.

Survey Design and Research Division of NSSO developed the sample design and survey

instruments and also prepared the report. The Field Operations Division of NSSO carried

out the fieldwork and the Data Processing Division of NSSO handled the data processing

and tabulation work. The Coordination and Publication Division of NSSO coordinatedvarious activities pertaining to the survey.

I am grateful to the Chairman and Members of the then Governing Council of NSSO and

also the Chairman and Members of the Steering Committee and Working Group for theNSS 62nd round for their technical guidance at various stages of survey work. I convey

my special thanks to Chairman and members of the National Statistical Commission and

also to the Editor of the report for their valuable advice in finalizing the report. I amgrateful to all Officers and Staff Members of this Ministry who were associated with the

survey for their contribution. Special thanks are also due to the informants who provided

the requisite information during the data collection in the survey.

The report, I hope, will be useful to planners, policy makers and researchers. Commentsand suggestions for improvement will be most welcome.

New Delhi

December, 2007

(S.K.Sinha)

Director General & Chief Executive Officer

National Sample Survey Organisation


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NSS Report No. 524: Operational Characteristics of Unorganised Manufacturing Enterprises in India, 2005 06.

i

Contents

Page

List of Tables i-iiHighlights iii

Chapter One Introduction 1 - 7

Chapter Two Concepts and Definitions 8 - 13

Chapter Three Summary of Findings 14 - 37

Appendix A Detailed Tables A 1 A 409

Appendix B Coverage, Sample Design and

Estimation Procedure

B 1 B 16

Appendix C Facsimile of Schedule 2.2 C 1- C 8

Appendix A

Table no. Table description Page

1 Number of first stage units allotted and surveyed by State/UT A - 1

2 Number of enterprises surveyed by industry code for each State/UT A-2 A-37

3 Number of enterprises by industry code for each State/UT A-38 A-73

4 Per 1000 distribution of enterprises by nature of operation for each industry and for

each State/UT

A-74 A-89

5 Per 1000 distribution of enterprises by type of ownership for each industry and for

each State/UT

A-90 A-113

6 Number of workers by enterprise type for each industry and for each State/UT A-114 A-128

7 Per 1000 distribution of enterprises by type of location for each industry and for eachState/UT

A-129 A-152

8 Per 1000 distribution of workers by number of working hours in a normal day of the

enterprise during the reference year for each industry and for each State/UT

A-153 A-159

9 Per 1000 distribution of workers by number of working hours in a normal day of the

enterprise during the reference month for each industry and for each State/UT

A-160 A-166

10 Per 1000 distribution of workers by type of ownership for each industry and for each

State/UT

A-167 A-190


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NSS Report No. 524: Operational Characteristics of Unorganised Manufacturing Enterprises in India, 2005 06.

ii

Table no. Table description Page

11 Per 1000 distribution of enterprises by general education level of working owner of the

enterprise for each industry (only for proprietary and partnership enterprises) and for

each State/UT

A-191 A-214

12 Per 1000 distribution of enterprises by maintenance of accounts for each industry andfor each State/UT

A-215 A-229

13 Number per 1000 of enterprises by act/authority of registration for each industry and

for each State/UT

A-230 A-265

14 Number Per 1000 of enterprises by nature of problems faced for each industry and for

each State/UT

A-266 A-280

15 Per 1000 distribution of enterprises by type of contract for each industry and for each

State/UT

A-281 A-295

16 Number per 1000 of enterprises by type of assistance received for each industry and

for each State/UT

A-296 A-310

17 Per 1000 distribution of enterprises pursuing mixed activity by enterprise type for each

industry and for each State/UT

A-311 A-316

18 Per 1000 distribution of enterprises by growth status (over a period of last 3 years) for

each industry and for each State/UT

A-317 A-331

19 Per 1000 distribution of enterprises by number of months operated during last 365days for each industry and for each State/UT

A-332 A-346

20 Per 1000 distribution of enterprises working on contract (i) by source of equipment,

(ii) by supply of raw materials and (iii) specification of design for each industry and

for each State/UT

A-347 A-364

21 Per 1000 distribution of enterprises by other economic activities and major source of

annual income of owner of the enterprisefor each industry (for proprietary and

partnership enterprises only) and for each State/UT

A-365 A-379

22 Per 1000 distribution of workers by other economic activities and major source ofannual income of owner of the enterprisefor each industry (for proprietary and

partnership enterprises only) and for each State/UT

A-380 A-394

23 Per 1000 distribution of owners of enterprises undertaking other economic activities

during reference year by type of other economic activities for each industry and for

each State/UT

A-395 - A-409


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NSS Report No. 524: Operational Characteristics of Unorganised Manufacturing Enterprises in India, 2005-06.

iii

Operational Characteristics of Unorganised Manufacturing Enterprises in India

(July 2005-June 2006)

Highlights

(The survey was conducted in 4798 villages and 5125 urban blocks. A total of 82897enterprises (including 2260 list frame enterprises located in urban areas) were ultimately

surveyed.)

A total of 17070820 unorganised manufacturing enterprises were estimated in

India during 2005-06.

Of the total enterprises estimated, 71% were in rural India and 29% in urbanIndia.

OAMEs constituted 86% of all enterprises and the remaining 14% were

establishments.

A total of 36442799 persons were estimated to be working in unorganisedmanufacturing enterprises during 2005-06.

The number of workers per enterprise was about 2.13.

About 98 % of all enterprises were proprietary enterprises.

About 90 % of all enterprises were not registered with any agency.

About 3 % of all enterprises had no fixed premises of operation.

About 94 % of all enterprises were perennial enterprises.

About 81 % of all enterprises operated more than 9 months during the reference

year.

About 92 % of all enterprises did not receive any assistance from any governmentor non-government agency.

About 32 % of all enterprises had undertaken at least some work on contract

basis.

About 28 % of all enterprises had undertaken other economic activity.

Majority (77%) of enterprises having other economic activities as the major

source of income derived income from agriculture, hunting, forestry, mining,quarrying etc (sec. A to C of NIC 2004).

About 3 % of all enterprises were pursuing mixed activity during 2005-06.


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NSS Report No 524: Operational Characteristics of Unorganised Manufacturing Enterprises in India, 2005-06

1.

Chapter One

Introduction

1.1 Brief history

1.1.1 An all-India survey on unorganised manufacturing enterprises was carried out by

the National Sample Survey Organisation (NSSO) as a part of the 62nd

round of NationalSample Survey (NSS) during July 2005 June 2006. The other subjects of enquiry,

which formed part of this round, were annual surveys on household consumer

expenditure and employment-unemployment.

1.1.2 Manufacturing sector is one of the important sectors in the Indian economy. As

per the latest available National Accounts Statistics1, during 2006-07, the manufacturing

sector had a share of about 16% in the GDP at factor cost. For the purpose of data

collection, manufacturing sector has been broadly sub-divided into two categoriesorganised (covering units coming under Factories Act, 1948) and unorganised

manufacturing. While data for organised manufacturing sector are collected through

Annual Survey of Industries (ASI), the same for the residual non-factory unorganised

manufacturing sector are collected periodically through NSS as follow-up surveys ofEconomic Censuses (EC). The unorganised manufacturing sector has roughly about one-

third share in the total contribution by the manufacturing sector in the GDP.

1.1.3 Recognizing the importance of the unorganised manufacturing sector in terms of

its share in GDP as well as in total employment, NSS has taken up this subject in many of

its rounds. The collection of data on unorganised manufacture has a long history in the

NSS. In fact, the very first round of NSS had small-scale manufacture and handicrafts asone of its subjects of enquiry. Thereafter, data on small-scale manufacture were collected

also in the NSS rounds 3-10, 14, 23 and 29. These surveys used the list of villages as per

the Population Census and list of census enumeration blocks, or lists of Urban FrameSurvey (UFS) blocks as per the NSSO subject to their availability, as the sampling frame

for selection of villages / urban blocks.

1.1.4 A review of the surveys conducted by NSSO in the initial rounds mentionedabove indicated that a better sampling frame was necessary to generate more useful

statistics on the unorganised sector. The need for basic information on geographical areas

of concentration of enterprises for stratification purpose was strongly felt with a view to

developing more efficient sampling designs. This demand ultimately culminated in theconduct of periodic Economic Censuses (EC), which provided the frame for the follow-

up surveys on non-agricultural enterprises including those engaged in unorganised

manufacture.

1.1.5 With the launching of the EC in 1977 (five ECs have been conducted so far), the

follow-up surveys of EC on unorganised manufacture generally used the village andblock level information on number of enterprises/workers as per the EC for selection of

1Press Note, 31

stMay 2007, Central Statistical Organisation


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villages and urban blocks in the follow-up surveys. The approach of data collection from

enterprises was also changed from the household approach that used to be adopted

earlier (i.e. prior to the launching of EC) to the site approach whenever such sites

existed. So far NSS has conducted six follow-up surveys of EC through rounds 33rd

(1978-79), 40th (1984-85), 45th (1989-90), 51st (1994-95), 56th (2000-01), and 62nd (2005-

06) with unorganised manufacture as the main subject of enquiry. In the 62nd round of

NSS, area frame thrown up by the latest EC (1998) was however used only partially

because the frame was considered to be old. However, for 27 cities having a populationof one million or more (as per Census 2001) which are likely to have a substantial share

in the total number of unorganised manufacturing enterprises in the country, a conscious

decision was taken to make use of the list of urban blocks giving count of number of

enterprises/workers at the block level as per EC 1998 as the sampling frame forstratification and selection of urban blocks. For the remaining towns/cities, latest lists of

UFS blocks were used as the sampling frame2. In case of rural areas, list of villages (or

panchayat wards in case of Kerala) as per Census 2001 served as the sampling frame forselection of villages as the first-stage units (FSUs).

1.2 Scope of the survey and sample design in brief

1.2.1 The term unorganised manufacture under the coverage of 62nd round basically

referred to all manufacturing enterprises, which were not covered by ASI. Allgovernment and public sector undertakings were also outside the coverage of the survey.

In terms of National Industrial Classification (NIC) 2004 codes, the 62nd round survey on

unorganised manufacture covered the NIC 2-digit codes 15-37. In addition, enterprisesengaged in cotton ginning, cleaning and baling (NIC 2004 code 01405) were also covered

under the survey (see Table 0 at the end of this chapter for the NIC codes under coverage

along with their descriptions). It is to be noted that only those manufacturing enterprises,

which operated for at least 30 days (15 days for seasonal enterprises) during the last 365days preceding the date of survey, were eligible for survey.

1.2.2 The survey covered the whole of the Indian Union except (i) Leh and Kargildistricts of Jammu & Kashmir, (ii) interior village of Nagaland situated beyond five

kilometres of bus route and (iii) villages of Andaman and Nicobar Islands which remain

inaccessible throughout the year. All the sample FSUs of the districts Poonch and Rajouri

of the state of Jammu and Kashmir became casualty. Thus, the estimates for Jammu andKashmir as well as for all-India do not include these areas.

1.2.3 As stated earlier, the fieldwork for the 62nd round was carried out during July

2005 to June 2006. The entire survey period was divided into four sub-rounds of threemonths each. In each of these sub-rounds, equal number of sample villages/urban blocks

was allotted for survey with a view to ensuring uniform spread of fieldwork over the

entire survey period. All efforts were made to complete the fieldwork in a samplevillage/block during the sub-round period to which it was allotted.

2 It is to be noted that UFS blocks do not provide information on number of enterprises/workers at the UFS

block level. But information on whether any UFS block of the town/city is located in industrial area,

bazar/business area, etc. is available. This information was utilized for stratification/selection of sample

UFS blocks (see Appendix B for details).


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1.2.4 One salient feature of the sample design adopted during the 62nd round was the

use of list frame in order to capture sufficient number of relatively bigger

manufacturing units under the coverage of the survey. It is quite natural that even withinthe unorganised manufacturing sector, there are likely to be some very big non-ASI

manufacturing units whose contribution to total gross value added is likely to be

substantial. Thus, with a view to improving the overall estimate of gross value added per

worker, total number of workers, total input, total output, etc., a dual frame approach wasconsidered appropriate for sampling purposes in NSS 62nd round. A list of 8,000 big non-

ASI manufacturing enterprises3 for the urban sector only was prepared as per the data of

the census of manufacturing enterprises conducted by Development Commissioner of

Small Scale Industries (DCSSI) in 2003. This list served as the list frame. All these unitsin the list frame were considered for survey without resorting to any sampling. For the

coverage of all other unorganised manufacturing enterprises in the universe (i.e. other

than 8,000 enterprises featuring in the list frame), an area frame approach was followedfor sampling of unorganised manufacturing units in stages. It is worthwhile to mention

that this dual frame approach was experimented for the first time in the 62nd round.

1.2.5 In the area frame approach, the list of all the villages (panchayat wards in case of

Kerala) / urban blocks of the country served as the sampling frame of FSUs (also see

paragraph 1.1.5). The first stage units (FSUs) were villages (panchayat wards in case ofKerala) in the rural sector and urban blocks in the urban sector. The ultimate stage units

were unorganised manufacture enterprises in both the sectors. However, in case of large

FSUs requiring hamlet-group (hg) / sub-block (sb) formation, one intermediate stage inthe sampling involved the selection of two hgs / sbs from each FSU out of a minimum

of three hgs/sbs formed in the FSU. Of these two selected hgs/sbs, one was selected

with probability 1 (termed as segment 1) and another one (termed as segment 2) was

selected from among the remaining hgs/sbs of the FSU at random. The hg/sb selectedwith certainty (i.e. segment 1) was the hg/sb having maximum number of directory

manufacturing establishments (DMEs) (or with maximum number of non-directory

manufacturing establishments (NDMEs) if there was no DME, or with maximum number

of own account manufacturing enterprises (OAMEs) if there was no DME/NDME, or

with maximum population if there was no DME/NDME/OAME4

in the entire FSU).

Smaller FSUs without any hg/sb formation were identified/categorized as segment 1 for

the purpose of survey (segment 2 does not exist for such FSUs). As regards the first stagestratification, two basic strata were formed within each district of a State/UT: rural

stratum comprising all rural areas of the district and urban stratum consisting of all urban

areas of the district. However, each city with a population of one million or more as per

Census 2001 was invariably treated as a separate stratum by itself. For details ofstratification, sub-stratification and selection of sample FSUs, reference may be made to

Appendix-B of this Report.

1.2.6 For each of segments 1 and 2 for the selected sample FSUs, a frame of eligible

unorganised manufacturing enterprises was prepared by the field investigators by visiting

each and every house/household within the selected geographical area. While doing so, if

3 For definition of such big enterprises, refer to Appendix-B of this report.4see Chapter Two for definitions of DME, NDME and OAME.


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any enterprise of the list frame was encountered, care was taken not to list it again within

segment 1 or 2 as a part of the area sample / area frame to guard against duplication of

enterprises between the two types of frames. Listing and sampling of enterprises in the

area frame was independent for each of segments 1 and 2. In this context, it may bementioned that for each selected FSU of rural sub-strata 1 and 2 only

5 (see Appendix B

for composition of these two sub-strata), segment 9 was also carved out within the FSU,

which comprised top 10 (in terms of number of workers) big non-ASI registered SSI

manufacturing units6

located within the boundaries of the entire FSU (see para 1.4.1).The list of such units for selected FSUs was made available to the field investigators in

order to facilitate formation of segment 9. Respective frames of segments 1 and 2 in these

FSUs excluded the units listed under segment 9.

1.2.7 All the eligible enterprises listed under each of segments 1, 2 and 9 were stratified

into 2 broad second-stage strata by enterprise type i.e. OAME & NDME/DME. Each of

these two broad second-stage strata was further divided into 3 broad manufacturinggroups (BMG) i.e. BMG 1, BMG 2 and BMG 3. BMG 1 comprised eligible enterprises

belonging to NIC codes 15 and 20. BMG 2 consisted of eligible enterprises belonging to

NIC Codes 23, 27, 30-35 and 01405 while all other eligible enterprises belonging to therest of the NIC codes under coverage formed BMG 3. Thus within a segment for any

given sample FSU, six ultimate second-stage strata were formed by jointly considering

the broad second-stage strata and BMG. A total of 12 manufacturing enterprises twofrom each ultimate second-stage stratum were selected for detailed enquiry. In case of

shortfall of enterprises in the frame of any particular second-stage stratum, compensation

was made by selecting additional samples from other second-stage strata so that a total of12 enterprises were selected from each FSU for detailed enquiry.

1.2.8 Design-based estimates of aggregates for any selected survey characteristic were

obtained separately for list frame and area frame. Finally these two sets of estimates wereadded to get the pooled aggregate estimate for the combined frame. In this report,

discussion will be focused on the pooled estimate based on two types of frames used in

the survey.

1.3 Items of information and method of data collection

1.3.1 For collection of data from sample manufacturing enterprises, Schedule 2.2 wasdesigned. The schedule was organized into 15 blocks. The format of the schedule is

placed as Appendix C of the report. The items of information collected through different

blocks of the schedule included the following:

Particulars of operation and background information of the enterprise Principal operating expenses

Other operating expenses

Principal receipts

Other receipts

5 Rural sub-strata 1 and 2 consisted of villages having big non-ASI registered SSI manufacturing units as

per the DCSSIs census/survey in 2003.6

See Appendix B for details including definition for bigness.


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Gross value added

Employment particulars

Compensation to workers

Fixed assets owned and hired

Loan outstanding

1.3.2 The above items of information from any enterprise were collected either from

books of accounts of the sample enterprises or through oral enquiry depending upon

whether the enterprises maintained books of accounts or not. Reference periods used forvarious items of information are discussed under Chapter Two.

1.4 Sample size and its limitation

1.4.1 Out of 8,000 enterprises selected from the list frame, data could be collected from

only 2,260 enterprises (for state/UT wise distribution of allotted and surveyed numbers of

enterprises as per the list frame, reference may be made to columns 8 and 9 of Table 1ofAppendix A). Thus a large percentage (72%) of the list frame enterprises became

casualties. Among the enterprises which were treated as casualties, the majority (around

70%) actually belonged to the category of Government/public sector undertaking/ASI

units, which were not under the coverage of 62nd round. Another 18% of the enterpriseswere found to be either non-operative or not traceable. In the area frame, 80,637

enterprises (42,050 from rural India and 38,587 from urban India) spread over 4,798

villages and 5,125 urban blocks across the country were surveyed. It is important to

mention here that even though a large percentage of list frame enterprises becamecasualty, theoretically the surveyed enterprises netted through the list frame and area

frame represented the whole universe of the unorganised manufacturing sector. The

estimation procedure developed for the purpose (see Appendix B) also ensured this. Asregards segment 9, it was formed only in substrata 1& 2 of rural sector.At all-India level,

462 villages were allotted to sub-stratum 1 and 856 villages to sub-stratum 2. For sub-

stratum 2, eight villages became casualty. Only in 241 villages (52% of surveyedvillages) of sub-stratum 1 and 549 villages (65% of surveyed villages) of sub-stratum 2,

an eligible enterprise was available for survey in segment 9, although for each of such

allotted FSUs, a list of at least a few enterprises was made available to field offices for

survey through segment 9. For FSUs where at least one eligible enterprise was availablein segment 9, at all-India level 1,659 segment 9 enterprises were listed out of which data

could be collected from 1,377 enterprises.

1.4.2 Thus, altogether a total of 82,897 unorganised manufacturing enterprises

considering both list frame and area frame were surveyed. In the appendix tables,

although estimates are presented at disaggregated level i.e. sector (rural/urban/combined)

x enterprise type (OAME/NDME/DME/All) by NIC code (for all-India) or by state/UT,

sample size at the ultimate level of disaggregating may sometimes be very small. Theusers are advised to look at the related sample size while using the survey results

particularly at the disaggregated level.


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1.5 Plan of release of reports

1.5.1 Based on the data collected through the survey on unorganised manufacture, three

reports will be brought out. The present one is the first in the series. This report primarilydeals with the operational characteristics of the enterprises. The next one will focus on

employment, assets and loans while the last report will discuss the details of input, output

and value added by the unorganised manufacturing sector.

1.6 Layout of the present report

1.6.1 The report contains three Chapters (including the present introductory one) and

three Appendices. Chapter two deals with the concepts and definitions of various termsused in the survey on unorganised manufacture. Chapter three discusses the main

findings of the survey based on the data collected through central sample i.e. data

collected by the field staff of NSSO. Detailed tables are presented in Appendix A. Thesample design and estimation procedure is given in Appendix B while facsimile of the

schedule of enquiry is given in Appendix C.


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7.

Table 0: Description of manufacturing activities under the survey coverage of NSS62

ndround

Division Description

01405 Cotton ginning, cleaning and baling

15 Manufacture of Food Products and Beverages16 Manufacture of Tobacco Products

17 Manufacture of Textiles

18 Manufacture of Wearing Apparel; Dressing and Dyeing of Fur

19 Tanning and Dressing of Leather; Manufacture of Luggage, Handbags,

Saddlery, Harness and Footwear

20 Manufacture of Wood and of Products of Wood and Cork, Except

Furniture; Manufacture of Articles of Straw and Plaiting Materials

21 Manufacture of Paper and Paper Products

22 Publishing, Printing and Reproduction of Recorded Media23 Manufacture of Coke, Refined Petroleum Products and Nuclear Fuel

24 Manufacture of Chemicals and Chemical Products

25 Manufacture of Rubber and Plastics Products

26 Manufacture of Other Non-Metallic Mineral Products

27 Manufacture of Basic Metals

28 Manufacture of Fabricated Metal Products, Except Machinery and Equipment

29 Manufacture of Machinery and Equipment N.E.C.

30 Manufacture of Office, Accounting and Computing Machinery

31 Manufacture of Electrical Machinery and Apparatus N.E.C.

32 Manufacture of Radio, Television and Communication Equipment and Apparatus

33 Manufacture of Medical, Precision and Optical Instruments, Watches and Clocks

34 Manufacture of Motor Vehicles, Trailers and Semi-Trailers

35 Manufacture of Other Transport Equipment

36 Manufacture of Furniture; Manufacturing N.E.C.

37 Recycling

N.E.C.- Not Elsewhere Classified


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8.

Chapter Two

Concepts and Definitions

2.1 Enterprise: An enterprise is an undertaking engaged in the production and / ordistribution of some goods and / or services meant mainly for the purpose of sale,whether fully or partly. An enterprise may be owned and operated by a single household

or by several households jointly on a partnership basis, or by an institutional body.

2.2 Manufacturing Enterprise: A manufacturing enterprise is a unit engaged in the

physical or chemical transformation of materials, substances or components into newproducts. It covers units working for other concerns on materials supplied by them. Also

included are units primarily engaged in maintenance and repair of industrial, commercial

and similar machinery & equipment, which are, in general, classified in the same class ofmanufacturing as those specialising in manufacturing the goods.

2.3 Unorganised Manufacturing Enterprise: The unorganised manufacturing sectorconsists of following types of enterprises:

(i) All manufacturing enterprises except those registered under section 2m(i) and

2m(ii) of Factories Act, 1948 and Bidi and Cigar Workers (conditions ofemployment) Act, 1966.

(ii) All manufacturing enterprises except those run by Government (Central

Government, State Governments, Local Bodies) / Public Sector Enterprises.

2.4 Household Enterprise: A household enterprise is one which is run by one or more

members of a household or run jointly by two or more households on partnership basis

irrespective of whether the enterprise is located in the premises of the household(s) ornot. In other words, all proprietary and partnership enterprises are household enterprises.

2.5 Non-household Enterprise: Non-household enterprises are those which are

institutional i.e. owned and run by the public sector (Central or State Government, local

self-governments, local bodies, government undertakings, etc.), corporate sector, co-operative societies, other type of societies, institutions, associations, trusts, etc. Non-

household enterprises covered under public sector were not included in the currentsurvey.

2.6 Own-account Enterprise: An enterprise, which is run without any hired worker

employed on a fairly regular basis7

, is termed as an own account enterprise. If such anenterprise is engaged in manufacturing and/or repairing activities, it is termed as Own

Account Manufacturing Enterprise (OAME).

2.7 Establishment: An enterprise which is employing at least one hired worker on afairly regular basis is termed as establishment. Paid or unpaid apprentices, paid household

7 "fairly regular basis" means the major part of the period when operation(s) of an enterprise are carried out

during a reference period.


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2.15 Working Owner: The owner who personally works in the proprietary or partnership

enterprises on a fairly regular basis is called working owner. In fact, in most of the own-

account enterprises the owner himself/ herself manages all activities of the enterprise

without the help of anyone (on a fairly regular basis). In the case of partnershipenterprises, if only one partner or some of the partners or all the partners work in the

enterprise on a fairly regular basis then they are considered as working owners.

2.16 Hired Worker: A hired worker is a person employed directly or through anyagency on payment of regular wage / salary in cash or kind. Apprentices, paid or unpaid,

are to be treated as hired workers. Paid household workers, servants and resident workers

of the enterprise are also to be considered as hired workers.

2.17 Other Worker / Helper: This includes all persons belonging to the household of

the proprietor or households of the partners who are working in or for the enterprise

without regular salary or wages. Persons working as exchange labourer in the enterprisewithout salary or wages will also be covered in this category. All unpaid household

workers / helpers who are associated with the activities of the enterprise during the

reference month are considered in this category.

2.18 Mixed Activity: There are enterprises that carry out a number of activities

simultaneously. For example, a bakery may also sell cold drinks, a rice mill may sellsugar, a factory may run a hospital in its premises, etc. Each such activity was treated as a

separate enterprise if information for them was separately available. If the accounts were

not separable then the data pertained to the enterprise as a whole and the enterprise wasclassified as having mixed activities and the activities of such enterprises are a mixture of

NICs. The activities may be mixed at any level of NIC, but for the present survey an

enterprise was considered to have mixed activities if its activities were different at 2-digit

level of NIC-2004.The appropriate NIC in such cases was determined on the basis ofmajor activity. Major activity refers to the activity which yielded maximum

income/turnover/employment. The above criteria were applied in the given order, i.e.,

income first, then turnover and then employment, to determine the major activity.

2.19 Multiple Activity: Since many of the entrepreneurs belonging to the unorganised

sector operate at small or marginal levels, the phenomenon of carrying out more than one

activity simultaneously or at different points of time is quite prevalent. If the activities

were carried out at one point of time at the same location and the information was notseparately available, then it was taken as mixed activity. Carrying out of more than one

economic activity by the entrepreneur during the reference year is called multiple

activities.It differs from mixed activities in the sense that former is with respect to theentrepreneur whereas the latter is with respect to the enterprise. However, an

entrepreneur of a manufacturing enterprise manufacturing woollen garments before

winter and cotton clothes before summer will not be considered as carrying out multiple

activities. Some examples of multiple activities are: i) a person carrying out agriculturalactivity at sowing / harvesting season and doing carpentry at the same time or at othertimes, ii) a lady working as regular wage / salary earner and also running a tailoring shop

in the evening, etc iii) A household servant is making paper envelopes in free time , iv)


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An agricultural worker engaged in handicraft making during non-harvesting season of the

year.

2.20 Working on Contract: The enterprises in the unorganised sector are mainly smallunits. In many cases, the enterprises are seen to be working as per orders from a bigger

unit. In such cases, certain conditions are put on the servicing unit by the contractor or

master unit. Conditions may pertain to sale of products, supply of raw materials, mode of

payment etc. In many cases, the contractor specifies the design of the product to theservicing unit e.g. garment manufacturing, shoe manufacturing etc. If the surveyed

enterprise had undertaken any work on contract during the reference year, it was

considered as enterprises working on contract.

2.21 Fixed Assets: Assets held for the purpose of producing or providing goods or

services and not for resale in the normal course of entrepreneurial activities are classified

as fixed assets. These cover all goods, new or used, that have a normal economic life ofmore than one year from the date of purchase.

2.22 Land and Building: Land means the land on which the enterprise is accommodatedtogether with the surrounding area, which is used for the enterprise. This also includes

improvement to land. However, if only a portion of the land belonging to the residence

of a household is utilised for the enterprise, only that portion of the land is considered ascapital assets for the enterprise. Land owned with permanent heritable possession with or

without right to transfer the title comes under this category. Land held on long-term

lease, say, 30 years or more, is also treated as land owned. Building is the structure,where activities of the enterprise are undertaken. This also includes all other structures

like shed, house, portions of a house or other structure, building under construction and

other conveniences in which the activities of the enterprise are carried out. This also

includes other constructions such as passage, wall, water tank, sewerage, tube-well, etc.

2.23 Plant and Machinery: Plant generally means an assembly of machinery /

equipment / devices installed for the operation of entrepreneurial activities. Machinerymeans an implement or mechanical device used in the entrepreneurial activities. These

are assets of durable nature and can be easily identified.

2.24 Transport Equipment: All vehicles, power-driven or man / animal-driven, used for

transporting persons, goods and materials by the enterprise in connection with its activityare covered in this category. Animals, if used for drawing vehicles or carrying loads, will

be treated as part of transport equipment.

2.25 Tools and Other Fixed Assets: Tools refer to small loose implements, generally

held in hand for operation and having normal life of more than one year. Other fixed

assets refer to other durable equipment which are used for the entrepreneurial activityeither directly or indirectly. These include furniture, fixtures, laboratory equipment,

office equipment etc. Livestock used in oil-mill is also covered under this category.

2.26 Net additions to fixed assets during the last 365 days: Net addition to fixed assetswas obtained by subtracting depletion of assets from the additions made during the last


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13.

365 days. Addition to the fixed assets could be made through purchase (new or used) or

through own construction. Improvements on land, new construction of building, shed,

structure, as well as assets produced on own account during the last 365 days were

considered as additions to the fixed assets. Depletion of assets was obtained byconsidering the assets sold and discarded during the last 365 days. The value of assets

disposed of in any manner other than sale, were treated as value of assets discarded.

Besides obsolescence (gone out of use) of an asset, this included loss due to theft,

damage, accident etc.

2.27 Loan: Any borrowing in cash or kind to be repaid in cash or kind is treated as loan.

Loans taken for the purpose of utilising the same in the entrepreneurial activities of an

enterprise were considered even if such loans were used for other purposes. On the otherhand, loans taken for other purposes but ultimately used in the enterprise were excluded.

2.28 Operating Expenses: The total of values of raw materials, electricity, fuel,lubricants and auxiliary materials consumed; cost of maintenance, services purchased and

other expenses incurred during the reference period by an enterprise was considered as

operating expenses.

2.29 Receipts: The sale value of products and by-products manufactured by an enterprise

together with the value of services rendered to other concerns and other receiptsincidental to entrepreneurial activities are considered as total receipts.

2.30 Gross Value Added: Gross value added is taken as additional value created by theprocess of production of an enterprise to the economy. Gross value added is calculated by

deducting total operating expenses from the total value of total receipts during the

reference period.


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14.

Chapter Three

Summary of Findings

3.1 Introduction: The present report, the first in the series, contains estimates of someoperational characteristics of the enterprises engaged in unorganised manufacturing andrepairing activities, like their location, status of maintenance of written accounts,registration status, number of months of operation, problems faced, etc. A summary ofthese results is presented in this section. Detailed tables are given in Appendix A for ruraland urban areas and for both areas combined at all India and State / UT levels and bydifferent types of industries. These tables give information relating to Own AccountManufacturing Enterprises (OAMEs), Non-Directory Manufacturing Establishments(NDMEs), Directory Manufacturing Establishments (DMEs) as well as on all types ofenterprises taken together. In some cases, the figures for totals and proportions presentedin detailed tables may vary marginally due to rounding off. The figures presented in thisreport are based on central sample i.e. data collected by the field staff of National

Sample Survey Organisation.

3.1.1 A few important characteristics as estimated in 62nd

(2005-06) round as well as thepreceding two rounds i.e.56th (2000-01) & 51st (1994-95) have been presented in thisreport to show the extent of change over various survey periods. Although, the coverageof manufacturing and repairing enterprises differed to some extent in the three rounds,they are unlikely to effect any serious distortion in the comparative estimates of rates andproportions presented in this report. However, the difference in coverage is summarisedbelow:

3.1.2 Differences in coverage across rounds -coverage of manufacturing andrepairing enterprises in 62

ndround & 56

thround identical except that While-you-

wait services under printing of textiles (NIC-98 code 1712) and engraving of metals

(NIC-98 code 2892) now classified in NIC-2004 under repair of personal and householdgoods (NIC-2004 code 52609) were covered in 56th round but not in 62nd round.

Some examples of While-you-wait services are:

i) Households giving new/ old clothes to a shop for block printing, embroidery, etc.ii) shop-owners writing name-plates, etc. on metal,

iii) Boutique shops purchasing sarees and doing art-work either themselves or through

outsourcing before sale, etc.

3.1.3 Coverage of manufacturing and repairing enterprises in 56th

round & 51st

round differed in respect of the following activities:

a)activities covered in 51st

round but not in 56th round:i) Repair and maintenance of computers and computer based systems (NIC 1987 orNIC 87 code 3941), ii) Repair of office, computing and accounting machinery otherthan computers and computer based systems (NIC 87 code 3942), iii) Repair of heavymotor vehicles (NIC 87 code 398), iv) Repair of household electrical appliances (NIC87 code 971), v) Repair of TV, VCR, radio, transistor, tape-recorder and otherelectronic appliances (NIC 87 code 972), vi) Repair of watches, clocks and jewellery(NIC 87 code 973), vii) Repair of motor vehicles and motor cycles except trucks,lorry and other heavy vehicles (NIC 87 code 974), viii) Repair of bicycles and cycle


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15.

rickshaws (NIC 87 code 975) and ix) Repair enterprises not elsewhere classified (NIC 87code 979).

b) Cotton ginning, cleaning and baling (NIC 98 code 01405) was covered in 56th

round but not in 51

st

round.

3.1.4 Some of the repairing activities mentioned above were part of manufacturing sectorin NIC 87 (15-39) and some were part of services sector (50-97) in NIC 87. However, allthese repairing activities were included in the survey on unorganised manufacturingenterprises in 51st round. But all these repairing activities got classified under servicessector (50-93) both in NIC 98 and NIC 2004 which were respectively followed in 56 thround and 62nd round.

3.1.5 As the coverage of the survey on unorganised manufacturing enterprises both in56

thround and 62

ndround included only industries belonging to NIC Divisions 15-37 as

well as NIC code 01405, the above repairing industries got excluded from the coverageof 56th round as well as 62nd round.

3.1.6 So if we now compare the coverage of 51st round and 62nd round, it is apparent thatthe above repairing activities were covered in 51st round but not in 62nd round. AlsoCotton ginning, cleaning and baling (NIC 2004 code 01405) was covered in 62nd roundbut not in 51st round.

3.1.7 It may be mentioned that repairing activities other than those mentioned above,which were included in NIC 2004 Div. 15 to 37, were covered in 62nd round and alsothose repairing activities barring the above mentioned ones, which were included in NIC1998 Div. 15 to 37, were covered in 56th round.

3.2 Number of first stage units surveyed: The number of villages and Urban FrameSurvey Blocks (i.e. the first stage units or FSUs) allotted and actually surveyed in

different State / UTs is given in Statement 1. It is seen from Statement 1 thatout of atotal number of 9997 allotted villages/UFS blocks, 9923 units could be surveyed, the rest74 units (FSUs) being casualties (0.74% of allotted FSUs).

3.3 Number of enterprises surveyed: Before looking into the various characteristics ofthe enterprises estimated from the survey, it is important to note the number of

enterprises surveyed in the 62nd round. Statement 2 gives information on the number of

enterprises surveyed state-wise for rural, urban and both sectors combined for thecountry. A total of82897(including 2260 list frame enterprises located in urban areas)

enterprises were surveyed all over India. About 51% of these enterprises were in rural

India and the remaining 49% were in urban India. List frame enterprises constituted only

5.5% of urban enterprises surveyed, the rest 94.5% being area frame enterprises.Maximum number of enterprises (both list frame and area frame enterprises) surveyed

was in Uttar Pradesh (9.95%) followed by West Bengal (7.97%), Tamil Nadu (7.96%),Andhra Pradesh (7.93%) and Maharashtra (7.76%). However, the highest percentage of

list frame enterprises surveyed was in Maharashtra (21.1%) followed by Uttar Pradesh

(10.9%), Haryana (9.8%), Rajasthan (8.7%), Tamil Nadu (8.6%).


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16.

Statement 1: Number of first stage units (villages/UFS blocks) allotted and surveyedby State / UT

area-frame villages/blocks

rural India urban India all-IndiaState/ UT allotted surveyed allotted surveyed allotted surveyed

(1) (2) (3) (4) (5) (6) (7)

Andhra Pradesh 376 376 296 296 672 672

Arunachal Pradesh 71 71 24 24 95 95

Assam 238 238 112 111 350 349

Bihar 303 303 200 200 503 503

Chhatisgarh 72 71 64 64 136 135

Delhi 12 12 76 76 88 88

Goa 16 16 24 24 40 40

Gujarat 161 161 256 256 417 417

Haryana 112 112 96 96 208 208

Himachal Pradesh 145 137 72 71 217 208

Jammu & Kashmir 152 115 200 180 352 295

Jharkhand 160 160 144 144 304 304

Karnataka 195 195 204 204 399 399

Kerala 283 280 160 159 443 439

Madhya Pradesh 217 217 296 295 513 512

Maharashtra 238 238 560 560 798 798

Manipur 56 56 64 64 120 120

Meghalaya 57 57 40 40 97 97

Mizoram 39 39 64 64 103 103

Nagaland 47 47 32 32 79 79

Orissa 229 229 148 148 377 377Punjab 136 136 216 216 352 352

Rajasthan 237 237 284 284 521 521

Sikkim 38 38 22 22 60 60

Tamil Nadu 304 304 368 368 672 672

Tripura 103 103 80 80 183 183

Uttaranchal 57 57 40 39 97 96

Uttar Pradesh 385 385 576 576 961 961

West Bengal 336 336 352 352 688 688

Andaman & N. Islands 32 32 16 16 48 48

Chandigarh 4 4 16 16 20 20

Dadra & Nagar Haveli 8 8 8 8 16 16Daman & Diu 8 8 8 8 16 16

Lakshadweep 4 4 16 16 20 20

Pondicherry 16 16 16 16 32 32

all-India 4847 4798 5150 5125 9997 9923

See Appendix Table 1


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17.

Statement 2: Number of enterprises surveyed by State / UT

number of enterprises surveyedurban IndiaState/UT rural India

list frame area frame all

all-India

(1) (2) (3) (4) (5) (6)Andhra Pradesh 3876 46 2661 2707 6583

Arunachal Pradesh 76 1 25 26 102

Assam 2084 13 818 831 2915

Bihar 2468 2 1355 1357 3825

Chhatisgarh 528 21 328 349 877

0

Delhi 71 110 377 487 558

Goa 147 2 112 114 261

Gujarat 1350 27 2135 2162 3512

Haryana 1118 222 829 1051 2169

Himachal Pradesh 1011 14 478 492 1503

0

Jammu & Kashmir 1083 39 1409 1448 2531Jharkhand 975 4 799 803 1778

Karnataka 1770 73 1593 1666 3436

Kerala 2682 46 1408 1454 4136

Madhya Pradesh 1641 115 2023 2138 3779

0

Maharashtra 1963 477 4000 4477 6440

Manipur 443 0 719 719 1162

Meghalaya 388 3 153 156 544

Mizoram 223 1 229 230 453

Nagaland 425 0 268 268 693

0

Orissa 2190 23 1079 1102 3292

Punjab 1130 173 1722 1895 3025Rajasthan 2032 196 2254 2450 4482

Sikkim 164 0 98 98 262

Tamilnadu 3198 195 3208 3403 6601

0

Tripura 1067 0 539 539 1606

Uttaranchal 377 5 178 183 560

Uttar Pradesh 3378 248 4619 4867 8245

West Bengal 3620 177 2813 2990 6610

A & N Islands 181 0 38 38 219

0

Chandigarh 38 13 7 20 58

Dadra & Nagar Haveli 69 5 45 50 119

Daman & Diu 77 0 80 80 157

Lakshadweep 30 1 52 53 83

Pondicherry 177 8 136 144 321

all-India 42050 2260 38587 40847 82897

See Appendix Tables 1& 2 for more detail

3.4 Estimated number of enterprises: Statement 3 gives the estimated number of

unorganised manufacturing enterprises categorised by enterprise types for rural, urban,

combined sectors of each State / UT. In the total enterprises, rural India had a share of71% while urban India had 29% share. In rural India, shares of OAMEs, NDMEs &


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18.

DMEs were respectively 92%, 6% & 2% and for urban India the percentages were 71%,

21% & 8% respectively.

Statement 3: Estimated number of enterprises in different States/UTs, separately by sector and type ofenterprise

estimated number of enterprises

rural India urban India all-IndiaState / UTOAME NDME DME all OAME NDME DME all OAME NDME DME all

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

Andhra Pradesh 998813 45316 41113 1085242 363988 69642 14366 447997 1362802 114958 55479 1533239Arunachal Pradesh 304 226 11 541 223 84 11 318 527 310 22 859Assam 306157 24581 2268 333006 21984 13647 2143 37774 328142 38228 4411 370781Bihar 639312 23138 929 663379 87057 20269 1692 109018 726369 43407 2621 772397Chhatisgarh 169729 1549 1332 172610 23967 8083 2821 34871 193695 9632 4153 207481

Delhi 767 1810 1062 3639 17127 45890 30979 93997 17894 47700 32041 97636

Goa 3200 888 458 4546 3053 2170 539 5762 6252 3059 997 10308Gujarat 276152 14538 10064 300753 246382 54198 53024 353605 522534 68736 63088 654358Haryana 102113 14267 3306 119687 60448 38319 11656 110423 162561 52586 14963 230110Himachal Pradesh 92900 6763 774 100437 4249 2163 593 7005 97149 8927 1367 107442

Jammu & Kashmir 132883 6501 1083 140468 25700 5973 1272 32944 158583 12474 2355 173412Jharkhand 522684 16622 944 540250 34243 10207 1248 45698 556927 26829 2192 585948Karnataka 580125 32323 50764 663211 228452 48749 21349 298549 808576 81071 72113 961761Kerala 374908 98679 19191 492777 119772 35062 11080 165914 494680 133741 30271 658692Madhya Pradesh 541814 13146 9502 564463 253319 31921 4857 290097 795133 45067 14359 854559

Maharashtra 499406 39967 16795 556168 341781 134658 93855 570294 841187 174625 110650 1126462Manipur 34388 1288 121 35797 14629 1864 228 16721 49017 3152 349 52518

Meghalaya 26803 6579 1131 34513 1027 1268 179 2474 27830 7847 1310 36987Mizoram 3078 196 18 3291 1123 624 63 1810 4201 820 80 5101Nagaland 6842 319 6 7167 1912 758 68 2739 8754 1078 75 9906

Orissa 843862 23583 3432 870877 69199 13748 3406 86352 913061 37330 6838 957229Punjab 135428 13610 1170 150208 87811 44532 10686 143029 223239 58142 11856 293237Rajasthan 371194 23428 6253 400875 181806 38180 15609 235595 553000 61608 21862 636470Sikkim 3260 397 26 3684 206 186 28 420 3466 583 54 4103Tamilnadu 720436 88273 41644 850353 467652 117692 46236 631580 1188088 205965 87880 1481933

Tripura 33235 5400 265 38900 3857 2357 256 6470 37093 7756 521 45370Uttaranchal 44403 7371 2167 53940 7877 6535 735 15146 52280 13906 2902 69087

Uttar Pradesh 1577716 100935 25865 1704516 455329 157969 41561 654859 2033045 258904 67426 2359375West Bengal 2061369 131237 31162 2223768 373178 114609 41238 529025 2434547 245846 72400 2752793A & N Islands 1283 488 101 1872 147 222 75 444 1429 710 177 2316

Chandigarh 567 154 31 753 457 148 15 621 1024 303 46 1373D & N Haveli 506 247 44 797 68 98 6 172 574 345 50 969Daman & Diu 852 133 479 1464 960 188 28 1175 1812 320 507 2639Lakshadweep 204 48 3 255 115 23 4 142 320 71 7 397Pondicherry 2026 1270 762 4058 5090 2975 1448 9513 7116 4245 2210 13572

all-India 11108720 745269 274277 12128266 3504186 1025013 413355 4942554 14612907 1770282 687632 17070820

See Appendix Table 3 for more detail


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19.

3.5 Statement 3A gives theestimated number of OAMEs and establishments (NDME &

DME) separately for rural , urban and combined sectors of the country. As expected,OAMEs dominated the unorganised manufacturing enterprises in rural, urban and

combined sectors of the country. Chart 1 gives the percentage of OAMEs,NDMEs and

DMEs in total number of enterprises. The share of OAMEs is about 86%, the remaining

14% being establishments. The share of NDMEs and DMEs were respectively 10% and4% in total number of enterprises.

Statement 3A: Estimated number of enterprises categorised by

enterprise type and sector at all-India level

estimated number of enterprisesenterprise type

rural India urban India all-India

OAME 11108720 3504186 14612907

Establishments

NDME 745269 1025013 1770282

DME 274277 413355 687632

Total 1019546 1438368 2457914

All 12128266 4942554 17070820

Chart 1:Percentages of OAMEs, NDMEs & DMEs in total number of

enterprises

86%

10% 4%

OAME

NDME

DME


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20.

3.6 Statement 3B gives the estimated total number of enterprises in descending order in States /

Uts. It is seen that during 2005-06 West Bengal had the highest share (16%) of unorganised

manufacturing enterprises. The two states, West Bengal & Uttar Pradesh together had 30 percent

share of all unorganisedmanufacturing

enterprises in the

country. However,

OAMEs hadsignificantly contributed

to total number of

enterprises in the top

state West Bengal, itspercentage being 88%.

In contrast, Uttar

Pradesh had highernumber of

establishments than West

Bengal but had lowernumber of OAMEs, as a

result of which it got

pushed down to thesecond position. This

fact is also noticed in

case of next two states insequence i.e. Andhra

Pradesh & Tamilnadu.

Maximum number of

establishments is noticedin Uttar Pradesh (13.3%)

followed by West Bengal

(12.9%), Tamilnadu(11.9%),Maharashtra

(11.6%) , Andhra

Pradesh (6.9%). Share of

top five states i.e. West

Bengal, Uttar Pradesh,Andhra Pradesh,

Tamilnadu, Maharashtra

in total number ofestablishments (56.6%)

is higher than its share in

total number ofenterprises (54.2%).

These five states also

had a share of 53.8% in

total number of OAMEs.

Statement 3B: Estimated number of enterprises in descending

order in different States/UTs,

estimated number of enterprises

State / UT

OAME Establishment

All

(in descending

order)

%

share

West Bengal 2434547 318246 2752793 16.13

Uttar Pradesh 2033045 326330 2359375 13.82

Andhra Pradesh 1362802 170437 1533239 8.98

Tamilnadu 1188088 293845 1481933 8.68

Maharashtra 841187 285275 1126462 6.60

Karnataka 808576 153184 961761 5.63

Orissa 913061 44168 957229 5.61

Madhya Pradesh 795133 59426 854559 5.01

Bihar 726369 46028 772397 4.52

Kerala 494680 164012 658692 3.86

Gujarat 522534 131824 654358 3.83

Rajasthan 553000 83470 636470 3.73

Jharkhand 556927 29021 585948 3.43

Assam 328142 42639 370781 2.17

Punjab 223239 69998 293237 1.72

Haryana 162561 67549 230110 1.35

Chhatisgarh 193695 13785 207481 1.22Jammu & Kashmir 158583 14829 173412 1.02

Himachal Pradesh 97149 10294 107442 0.63

Delhi 17894 79741 97636 0.57

Uttaranchal 52280 16808 69087 0.40

Manipur 49017 3501 52518 0.31

Tripura 37093 8277 45370 0.27

Meghalaya 27830 9157 36987 0.22

Pondicherry 7116 6455 13572 0.08

Goa 6252 4056 10308 0.06

Nagaland 8754 1153 9906 0.06

Mizoram 4201 900 5101 0.03

Sikkim 3466 637 4103 0.02Daman & Diu 1812 827 2639 0.02

A & N Islands 1429 887 2316 0.01

Chandigarh 1024 349 1373 0.01

D & N Haveli 574 395 969 0.01

Arunachal Pradesh 527 332 859 0.01

Lakshadweep 320 78 397 0.00

all-India 14612907 2457914 17070820 100.00



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21.

3.7 Statement 3C gives the estimated number of enterprises in descending order in

different industries at two-digit level of NIC-2004 at all-India level. It reveals that among

all unorganised manufacturing enterprises Manufacture of Wearing Apparel; Dressing

and Dyeing of Fur (NIC Div.18) was the most prominent activity having a share of 19%,which was closely followed by Manufacture of Tobacco Products (NIC Div.16) (16%).

About 78% of all enterprises were concentrated in five industries viz. Manufacture of

Wearing Apparel; Dressing and Dyeing of Fur (NIC Div.18), Manufacture of Tobacco

Products (NIC Div.16), Manufacture of Food Products and Beverages (Div.15),Manufacture of Textiles (NIC Div.17), Manufacture of Wood and of Products of Wood

and Cork, Except Furniture; Manufacture of Articles of Straw and Plaiting Materials

(NIC Div.20) and the rest (22%) were distributed over other industries.

Statement 3C: Estimated number of enterprises in descending order in different

industries at all-India level

Industry division

(NIC2004)

estimated number of

enterprises

% share

(1) (2) (3)

18 3213869 18.8316 2818150 16.5115 2602807 15.2517 2567813 15.0420 2138270 12.5336 1152007 6.7526 641819 3.7628 619875 3.6324 418210 2.45

29 174268 1.0221 168080 0.9819 144025 0.8422 117915 0.6931 110790 0.6525 72311 0.4227 35133 0.2135 25102 0.1534 15260 0.0933 9567 0.06

01405 9131 0.05

23 5886 0.0332 5745 0.0337 3892 0.0230 899 0.01all 17070820 100.00

For description of industries please see page 7.

See Appendix Table 4for more detail.


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22.

3.8 Statement

4A gives the

estimatednumber of

workers in

descending

order in States/ Uts. It is

seen that West

Bengal had

the highestshare (15%)

of workers in

unorganisedmanufacturing

enterprises of

the countryclosely

followed by

Uttar Pradesh(14%). About

55% of all

workers wereconcentrated

in five states

viz. West

Bengal, UttarPradesh,

Tamil Nadu,

AndhraPradesh,

Maharashtra.

Here also

OAMEs had

significantlycontributed to

total number

of workers inthe top state

West Bengal,

its percentagebeing 72%.

However,

Maharashtra

had highestshare (13%) of total number of workers of all the establishments of all states.

Statement 4A: Estimated number of workers in descending order

in different States/UTs,

estimated number of workersState / UT

OAME Establishment All(in

descending

order)

%

share

West Bengal 3980082 1513751 5493833 15.08

Uttar Pradesh 3744877 1543024 5287901 14.51

Tamil Nadu 1760313 1609206 3369519 9.25

Andhra Pradesh 2003229 935716 2938945 8.06

Maharashtra 1235091 1666326 2901417 7.96

Orissa 1836331 187210 2023541 5.55

Karnataka 1107479 866890 1974369 5.42

Gujarat 845248 1006884 1852132 5.08

Madhya Pradesh 1437477 303169 1740646 4.78Bihar 1311718 141355 1453073 3.99

Kerala 673565 717441 1391006 3.82

Rajasthan 797748 497587 1295335 3.55

Jharkhand 840208 109137 949345 2.61

Assam 472123 160358 632481 1.74

Punjab 313818 286992 600810 1.65

Haryana 234038 309986 544024 1.49

Chhattisgarh 376669 81697 458366 1.26

Delhi 26478 430730 457208 1.25

Jammu & Kashmir 260614 58255 318869 0.87

Himachal Pradesh 125522 39911 165433 0.45Uttaranchal 80353 67485 147838 0.41

Tripura 55272 89588 144860 0.40

Meghalaya 49894 40543 90437 0.25

Manipur 67836 13534 81370 0.22

Pondicherry 10009 34700 44709 0.12

Goa 8903 19584 28487 0.08

Nagaland 12925 3382 16307 0.04

Mizoram 6037 3410 9447 0.03

Daman & Diu 2239 6311 8550 0.02

Sikkim 5218 2408 7626 0.02

A & N Islands 2466 3571 6037 0.02

Arunachal Pradesh 1081 2220 3301 0.01

Chandigarh 1217 1382 2599 0.01

D & N Haveli 724 1540 2264 0.01

Lakshadweep 491 221 712 0.00

all-India 23687294 12755505 36442799 100.00



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23.

3.9 Statement 4B gives the estimated number of workers in descending order in different

industries at two-digit level of NIC-2004 at all-India level. Five Industry Divisions

together engaged about 71% of all workers in unorganised manufacturing enterprises of

the country These were Manufacture of Food Products and Beverages (Div.15)(17%),Manufacture of Textiles (Div.17) (17%), Manufacture of Wearing Apparel; Dressing

and Dyeing of Fur (Div.18) (14%), Manufacture of Tobacco Products (Div.16) (12%),

and Manufacture of Wood and of Products of Wood and Cork, Except Furniture;

Manufacture of Articles of Straw and Plaiting Materials (Div.20)(11%). The remaining19 industries engaged about 29% of all workers.

Statement 4B: Estimated number of workers in descending order in different

industries at all-India level

Industry division

(NIC2004)

estimated number of

workers

% share

(1) (2) (3)

15 6345768 17.41

17 6342544 17.40

18 4929831 13.53

16 4198516 11.52

20 4059074 11.14

36 2905333 7.97

26 2336108 6.41

28 1658219 4.55

24 863984 2.37

29 580315 1.59

19 473598 1.30

22 410785 1.1321 354218 0.97

25 277320 0.76

31 269118 0.74

27 112860 0.31

35 110546 0.30

34 92049 0.25

33 32801 0.09

32 23567 0.06

23 22130 0.06

01405 19669 0.05

37 14317 0.0430 10128 0.03

all 36442799 100.00

For description of industries please see page 7.

See Appendix Table 6 for more detail.


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24.

3.10 Statement 5 provides certain key information at all-India level for the current and two

previous rounds relating to survey on unorganised manufacturing enterprises. It is seen that

though estimated number of enterprises in rural areas went up from the period 1994-95 to

2005-06, the same in urban areas declined from the period 2000-01 to 2005-06. Also bothfor rural and urban areas, estimated number of workers went up from 1994-95 to 2000-01

and then declined in 2005-06. However, average number of workers per enterprise declined

over the period from 1994-95 to 2005-06 both for rural areas and all-India, though for

urban areas it was marginally higher in 2005-06 as compared to 2000-01.

Statement 5: Summary information over the last three rounds at all-India level

51st

round

(1994-95)

56th

round

(2000-01)

62nd

round

(2005-06)

(1) (2) (3) (4) (5)

Number of FSUs surveyed 8214 5586 4798

Number of SSUs surveyed 120609 60770 42050

Average number of enterprises

surveyed per FSU

14.7 10.8 8.8

estimated number of

enterprises

10497084* 11934583 12128266

estimated number of workers 22125993* 23985702 23458286

rural

Average number of workers

per enterprise

2.11 2.01 1.93




surveyed per FSU

13.6 10.3 7.5@

estimated number of

enterprises

4007027*

5089520 4942554


urban


per enterprise

2.76 2.57 2.63




surveyed per FSU

14.3 10.5 8.1@

estimated number ofenterprises

14504111* 17024104 17070820


all-

India


per enterprise2.29 2.17 2.13

Source: NSS Report No. 434, NSS Report No. 478, Appendix Table 4 & 6

figures of 51st round not strictly comparable with 56th round & 62nd round due to

coverage differences mentioned in para 3.1.

@ excluding 2260 list frame enterprises


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25.

3.11 Nature of operation: Statement 6 gives the percentage distribution of enterprises by nature of

operation of the enterprise. About 94% of all enterprises operated on perennial basis. The seasonal

enterprises were seen a little more prevalent in rural areas as compared to urban areas as they constitutedabout 5% of total number of enterprises in rural areas and about 2 % in urban areas. The proportion of

casual enterprises did not differ significantly between rural and urban areas, as the respective percentages

were 2% and 1% only.

Statement 6: Percentage distribution of enterprises by nature of operation separately by sector andtype of enterprise

percentage of enterprises


nature of

operation

OAME NDME DME all OAME NDME DME all OAME NDME DME all

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

perennial 92.9 95.6 61.0 92.4 97.1 98.7 98.9 97.6 93.9 97.4 83.8 93.9seasonal 4.5 4.1 39.0 5.3 1.8 1.1 1.0 1.6 3.9 2.3 16.2 4.2

casual 2.5 0.4 0.0 2.3 1.1 0.2 0.0 0.8 2.1 0.2 0.0 1.9

all 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


3.12 Change in nature of operation during the period 2000-2006: Statement 6A gives the

percentage distribution of enterprises by nature of operation of the enterprise at all-India level in

NSS 56th

& 62nd

rounds. It is seen that proportion of perennial, seasonal, casual enterprises did notchange much between the two rounds.

Statement 6A: Percentage distribution of enterprises by nature of operation separately bysector and type of enterprise in NSS 56

th& 62

ndrounds


all-India

nature of

operation

OAME NDME DME all

56th

round(2000-01)

62nd

round(2005-06)

56th

round(2000-01)

62nd

round(2005-06)

56th

round(2000-01)

62nd

round(2005-06)

56th

round(2000-01)

62nd

round(2005-06)

(1) (2) (3) (4) (5) (6) (7) (8) (9)perennial 92.8 93.9 95.6 97.4 83.8 83.8 92.7 93.9

seasonal 6.0 3.9 4.2 2.3 16.1 16.2 6.2 4.2

casual 1.2 2.1 0.1 0.2 0.1 0.0 1.1 1.9

all 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: Appendix Table 4 & NSS Report No. 478


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26.

3.13 Type of ownership of enterprises: Statement 7gives the percentage distribution of enterprises by

type of ownership separately for rural, urban and combined sectors of the country. It reveals that about

98% of all unorganised manufacturing enterprises were proprietary enterprises only. About 61% of allenterprises were proprietary enterprises owned by males while about 37% of all enterprises were

proprietary enterprises owned by females. It is interesting to see that percentages of proprietary enterprises

in rural enterprises and urban enterprises were nearly equal being 98% and 97% respectively. Only about

2% & 3% of the enterprises in rural & urban areas were operated on partnership basis. About 89% ofDMEs in rural areas and 84% of DMEs in urban areas were proprietary enterprises only. Apart from

proprietary and partnership enterprises, other enterprises had a negligible share in total number of

unorganised manufacturing enterprises.

Statement 7: Percentage distribution of enterprises by type of ownership of enterprises separately by

sector and type of enterprise



type of

ownership


(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

proprietary:

male 58.0 90.1 86.0 60.6 51.9 90.5 76.9 62.0 56.5 90.3 80.6 61.0

female 40.6 6.5 3.1 37.7 46.4 5.4 7.5 34.6 42.0 5.9 5.8 36.8

partnership between:members

of same

household

1.1 1.5 3.8 1.2 1.3 1.9 9.6 2.1 1.1 1.7 7.3 1.4

members

of

differenthousehold

0.2 1.6 6.1 0.4 0.4 1.9 4.9 1.1 0.3 1.8 5.4 0.6

others* 0 0.2 0.9 0 0 0.2 1.0 0.2 0 0.3 1.0 0

n.r. 0.1 0.1 0.1 0.1 0 0.1 0 0 0 0.1 0.1 0.1

total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

*others included co-operative society, limited company (outside public sector) and others



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27.

3.14 Location of the enterprises: Statement 8 gives the percentage distribution of enterprises by

location. It was found that 97% of all enterprises were operated at fixed premises either within the

household premises or outside. The proportion of enterprises run in the household premises was higher(81%) in the case of OAMEs as compared to NDMEs (27%) and DMEs (17%). Further, a higher

proportion of enterprises were operated from the household premises in rural areas (79%) when

compared with urban areas (58%). The proportion of enterprises operating from permanent structures

located outside the household premises was much higher in case of urban areas (38%) as compared withrural areas (15%). However, the proportion of OAMEs operating without fixed location did not differ

very significantly from NDMEs & DMEs, the percentages being 3.2%, 1.8% and 0.4% respectively.

Statement 8: Percentage distribution of enterprises by location, separately by sector and typeof enterprise

location of percentage of enterprises

enterprise rural India urban India all-India


(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

within hh.

premises 83.3 35.5 19.7 78.9 74.1 21.5 15.5 58.3 81.1 27.4 17.2 72.9

with fixed

location 13.1 60.9 79.7 17.6 23.4 77.7 84.2 39.8 15.6 70.7 82.4 24.0

a)permanent

structure 10.9 56.4 58.5 14.8 21.5 75.9 83.3 37.9 13.5 67.7 73.4 21.5

b) temporary

structure 0.9 2.9 14.6 1.4 1.4 1.5 0.3 1.4 1.0 2.1 6.0 1.4

c) withoutany structure 1.3 1.6 6.6 1.4 0.5 0.3 0.6 0.5 1.1 0.9 3.0 1.1

without

fixed

location 3.5 3.4 0.7 3.5 2.5 0.7 0.3 1.9 3.2 1.8 0.4 3.0

a) mobile

market 0.9 0.8 0.3 0.9 0.7 0.1 0 0.5 0.8 0.4 0.1 0.8

b) streetvendor 2.6 2.6 0.4 2.6 1.8 0.6 0.3 1.4 2.4 1.4 0.3 2.2

n.r. 0.1 0.2 0 0.1 0 0.1 0 0 0.1 0.1 0 0.1

all 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0



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28.

3.15 Distribution of workers by type of ownership of enterprises :The percentage distribution of

workers by type of ownership of enterprises separately for rural, urban and combined sectors of the

country is given in Statement 9. It reveals that 94% of workers in unorganised manufacturingenterprises were working in proprietary enterprises only. About 70% of total workers were employed

in proprietary enterprises owned by males and 24% in proprietary enterprises owned by females.

Though percentages of workers working in proprietary enterprises owned by males for rural areas,

urban areas & all-India were nearly the same , the corresponding percentages for proprietaryenterprises owned by females were 27%, 20% & 24% respectively.

Statement 9: Percentage distribution of workers by type of ownership of enterprises separately

by sector and type of enterprise

percentage of workers

rural India urban India all-Indiatype ofownership


(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

proprietary:

male 64.1 89.7 80.6 68.9 59.0 89.5 73.5 71.4 62.9 89.6 76.6 69.8

female 33.2 6.2 2.7 26.5 38.1 5.3 7.0 20.1 34.4 5.7 5.1 24.2

partnership between:

membersof same

household

1.9 2.0 4.4 2.2 2.0 2.5 10.6 4.7 1.9 2.3 7.9 3.1

members

of

different

household

0.5 1.8 11.1 2.0 0.6 2.4 7.0 3.0 0.5 2.2 8.8 2.4

others* 0.3 0.3 1.2 0.5 0.2 0.3 1.9 0.8 0.2 0.4 1.6 0.4

total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

*others included co-operative society, limited company (outside public sector) and others.



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29.

3.16 Maintenance of accounts: Statement 10 gives the percentage of enterprisesmaintaining accounts. Only 5% of the manufacturing enterprises reported to havemaintained accounts. Actually less than 1% of all unorganised manufacturing enterprisesprovided data from books of accounts while about 4% of enterprises did maintain

accounts but did not provide data from it. About 3% of the OAMEs, that constituted amajority of the enterprises, had reported maintaining accounts. As expected, thepercentage of enterprises reporting maintenance of accounts was higher in the case ofDMEs (32 %) as compared to the NDMEs (11%). However, only 11% of DMEs provideddata from books of accounts. The proportion of enterprises maintaining accounts washigher in urban areas (9%) as compared to rural areas (4%).

Statement 10: Percentage of enterprises maintaining accounts, separately by sectorand type of enterprise

maintenance of accounts

accounts usually

maintained

sector enterprise

type

data

recorded

from

books of

accounts

data

provided

orally

no usuable

books ofaccounts

maintained

n.r. all

(1) (2) (3) (4) (5) (6) (7)

OAME 0.2 2.7 96.8 0.3 100.0

NDME 0.6 6.4 92.7 0.3 100.0

DME 6.2 13.1 80.6 0.0 100.0

rural India

all 0.3 3.2 96.2 0.3 100.0

OAME 0.1 3.9 95.9 0.1 100.0

NDME 2.3 12.2 85.3 0.2 100.0

DME 13.8 26.2 60.0 0.0 100.0

urban India

all 1.7 7.5 90.7 0.1 100.0

OAME 0.2 3.0 96.6 0.3 100.0

NDME 1.6 9.8 88.4 0.2 100.0

DME 10.8 21.0 68.2 0.0 100.0

all-India

all 0.7 4.4 94.6 0.2 100.0



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30.

3.17 Specific problems faced in operation: Information on different types of problems faced by theunorganised manufacturing enterprises in their day-to-day operation was collected. This information wascollected in two ways. Information was obtained on whether the enterprise faced any of the specificproblems namely, non-availability of electricity connection, problem of power cut etc. as a

dichotomous response (i.e. as yes or no). If an enterprise reported to have faced any other problem,the same was recorded in terms of seven codes namely, local problems/ harassment-1, competition fromlarger units-2 etc (vide page C-2, Appendix C). Estimates obtained from the responses given regardingproblems faced in day-to-day operation are given in Statement 11. About 32 % of all enterprisesreported not having faced any specific problem in their day-to-day operation. Although this item (nospecific problem) was collected under any other problem, the percentage shown against item 3excludes such enterprises. The shortage of capital was reported to be the dominant problem faced by 42% enterprises followed by other non-specific problems (30 %) and problem of marketing of products (18%). The problem of power cut was reported more often by the larger enterprises (NDMEs and DMEs)than OAMEs. However, the smaller ones, i.e., the OAMEs reported more often, especially in rural areas,the problem of non-availability of electricity connection than NDMEs & DMEs.

Statement 11: Percentage of enterprises reporting some specific problems,

separately by sector and type of enterprise

type of percentage of enterprises reporting specific problems

problem rural India urban India all-India

faced OAME NDME DME all OAME NDME DME all OAME NDME DME all

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

1. no specific

problem

32.0 21.9 36.3 31.4 38.8 22.4 22.9 34.1 33.6 22.2 28.2 32.2

2. specific problem

faced:

a. non-availa-bility of

electricity

connection

14.6 10.4 7.6 14.2 3.3 2.9 2.6 3.2 11.9 6.1 4.6 11.0

b. problem of

power cut

10.2 26.1 23.0 11.5 15.4 36.0 39.3 21.7 11.5 31.8 32.8 14.4

c. shortage ofcapital

42.0 51.6 35.0 42.4 39.1 48.0 39.8 41.0 41.3 49.6 37.9 42.0

d. not

availability of

raw materials

16.0 12.4 14.1 15.7 9.7 7.2 8.7 9.1 14.5 9.4 10.9 13.8

e. marketing

of products

19.3 20.9 18.5 19.4 12.0 15.8 15.0 13.0 17.6 18.0 16.4 17.5

3. any other

problem*

29.5 36.6 34.1 29.9 26.6 38.9 39.9 30.5 28.9 37.9 37.6 30.1

* excludes no specific problem

See Appendix Table 14 fore more detail


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31.

3.18 Status of registration: Statement 12 gives the distribution of enterprises by status of

registration. About 10% of all enterprises were registered with a registration agency. The percentage

of registered OAME was 5% whereas the percentage of registered NDME and DMEs were 34% and

49% respectively at all-India level. The overall proportion of registered enterprises was much higher inurban areas (19%) as compared to rural areas (6%). It can be seen from detailed Table 13 (Appendix

A) that among all enterprises, registration with local bodies (7.1%) had the highest percentage,

followed by District Industries Centre (1.8%) and others (1.6%).

Statement 12: Distribution of enterprises by status of registration under/with any Act / Authorityseparately by sector and type of enterprise



status of

registra-

tionOAME NDME DME all OAME NDME DME all OAME NDME DME all

1 2 3 4 5 6 7 8 9 10 11 12 13registered 3.5 26.5 37.2 5.7 8.9 39.6 57.7 19.3 4.8 34.1 49.5 9.7

notregistered

96.5 73.5 62.8 94.3 91.1 60.4 42.3 80.7 95.2 65.9 50.5 90.3

all 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

See Appendix Table 13 fore more detail

3.19 Number of months operated: Statement 13 gives the distribution of enterprises by number ofmonths operated during the last 365 days. About 81% of the enterprises had worked for 9 months ormore during the last 365 days, while about 4% of the enterprises had operated for less than a quarter ofthe last year. More enterprises in urban areas had operated for longer duration than in rural areas. Inurban areas, the percentage of enterprises having specified duration of operation did not vary muchamong the three types of enterprises. In rural areas, however, these percentages varied among the threetypes of enterprises. As an example, proportion of DME units (43%) having operated for 6 months orless is much higher as compared to corresponding proportions in OAMEs (11%) & NDMEs (11%).

Statement 13: Percentage distribution of enterprises by number of months operatedduring the last 365 days, separately by sector and type of enterprise


rural India urban India all-india

no. of

months of

operationOAME NDME DME all OAME NDME DME all OAME NDME DME all

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

0 3 3.7 5.2 21.8 4.2 2.6 2.5 3.5 2.6 3.4 3.7 10.8 3.8

4 6 6.8 5.4 21.4 7.0 5.0 3.5 4.3 4.7 6.3 4.3 11.1 6.3

7 9 10.4 5.1 6.4 10.0 5.7 3.1 4.0 5.0 9.3 3.9 5.0 8.6

9 12 79.1 84.2 50.4 78.8 86.7 90.9 88.2 87.7 80.9 88.0 73.1 81.3

n.r. 0 0.1 0 0.1 0 0 0 0 0 0.1 0 0

all 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0



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32.

3.20 Type of assistance received: Statement 14 gives the proportion of enterprises receiving assistance

separately by type of assistance received. Only about 8 % of the enterprises had reported receiving

assistance of any kind. About 4 % and 3 % of enterprises received assistance in the form of institutionalloans and non-institutional loans respectively. The DMEs reported assistance in the form of loans more

often than NDMEs, which, in turn, received assistance more often than OAMEs. Proportion of

enterprises no

Unorganised Manufacturing 2006

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