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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Asian Development Bank (ADB)

ADB Economics

Working Paper Series

No. 183 | December 2009

 

[INDIA] Surveys of Informal Sector Enterprises— Some Measurement Issues
by Kaushal Joshi, Rana Hasan, and Glenita Amoranto
http://www.adb.org/Documents/Working-Papers/2009/Economics-WP183.pdf
[full-text, 37 pages]

 

Abstract

The informal sector represents an important part of the economy and the labor

market in many countries, especially developing countries. Measurements of the

informal sector are of intrinsic interest in their own right and contribute toward

exhaustive measures of gross domestic product (GDP). Considering that the

informal sector provides employment for income creation to a large number of

poor and contributes significantly to the GDP of many developing countries,

collecting statistics through surveys for accurate measurement of output, net

surplus, and value added is critical for national accountants, other users, and

for researchers working on policy-related issues. As most of the informal sector

enterprises do not maintain business accounts, the survey responses depend

highly on the recall by the respondent and the skills of the interviewer. Thus a

very important aspect of the surveys of informal sector enterprises is the design

of the survey questionnaire and the details to be captured in data collection

in order to accurately measure the characteristics of these enterprises. The

details sought in the survey questionnaire have implications on the accuracy

of data and hence in the measurement of expenditure, receipts, profits, and

gross value added (GVA) of these enterprises. In this paper we examine the

differences in the measures of (i) profits of an enterprise derived from a detailed

set of questions on incomes and expenses, versus profits obtained through a

single direct question; and (ii) GVA obtained using the production approach as

the difference of output and intermediate consumption from a detailed set of

questions on incomes and expenses, versus GVA using the income approach by

asking a few questions on factor incomes, and a single direct question on profits.

We use data from the 56th round survey of unorganized manufacturing conducted

by the National Sample Survey Organization of India during the period July

2000–June 2001. We also examine if the differences vary with the characteristics

of the enterprises, and suggest further empirical research to develop suitable

tools for providing accurate measurements of informal sector enterprises.

 

Contents

Abstract v

I. Introduction 1

II. Measurement of Informal Sector 2

III. NSS Surveys on Unorganized Manufacturing 4

IV. Data Description 5

V. NSS 56th Round Questionnaire 6

VI. Results of Data Review 9

A. Books of Accounts 11

B. Response Code 13

C. Informant 13

D. Enterprise Type 14

E. Size of Employment 15

F. Size of Plant and Machinery 15

G. Registration 16

H. Location of Enterprise 17

I. States 17

VII. Profits(derived) and Profits(direct): Profile of Enterprises 18

VIII. What do We Conclude from Above? 19

IX. Suggestions for Further Methodological Work 21

Appendix 23

References 29

 

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Institute for Workplace Studies 
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