Annual Survey of Industries: Gujarat's 79% units in operation, lower than most states

Percent factories operational

By Rajiv Shah
The latest Annual Survey of Industries (ASI) report, released by the Ministry of Statistics and Programme Implementation, Government of India, in March 2014, has revealed that out of a total of 22,220 factories in Gujarat, 17,529 are operational, suggesting that 21.11 per cent of the factories are either “closed” or are “not in operation”. This is higher than the all-India average of 19.33 per cent factories, “closed” or “not in operation”, but is lower than two major states out of 20 -- Haryana (21.42 per cent) and Tamil Nadu (37.95 per cent).
State-wise breakup suggests that Gujarat’s 79.89 per cent of the factories were in operation at the time when the survey was carried out, October 2012 to April 2013. This is against, Andhra Pradesh’s 79.85 per cent of operational factories (22,124 out of 27,708 factories), Karnataka’s 82.54 per cent operational factories (9459 out of 11460), Maharashtra’s 80.15 per cent operational factories (22,615 out of 28,215), Punjab’s 80.46 per cent operational factories (10,132 out of 12,592), and Uttar Pradesh’s 82.55 per cent operational factories (11,631 out of 14,090).
These facts havecome to light the backdrop of a senior Gujarat government official’s claim that in Gujarat 9 per cent of medium, small scale and micro enterprises (MSMEs) is shut down. Additional chief secretary, industries, D Jagatheesa Pandian, addressing an Associated Chamber of Commerce (ASSOCHAM) meet in Ahmedabad, said on March 27, "A survey conducted by Government of India in 2012 stated that the closure rate is about 9 percent in Gujarat. The absolute numbers are high. The percentage of closure is better than the national average of 22 percent and the rate of closure has also come down from 12 percent in 2007.”
Interestingly, these figures are higher than the claim by made officially by Gujarat government in response to the Aam Aadmi Party (AAP) leader Arvind Kejriwal's allegation on “rampant closure of MSME units in Gujarat”. The state government had said, in reply to Kejriwal, that the rate of closure of MSME units was just five percent as of March 2012. Neither Kejriwal, nor the Gujarat government, nor state official Pandian referred to the exact source of their information.

The ASI figures of March 2014 are based on its survey of industrial statistics, and covers all factories employing 10 or more workers using power and those employing 20 or more workers without using power. The scope of the ASI does not take into account in its survey establishments under the control of the Defence Ministry, oil storage and distribution units, restaurants and cafes and technical training institutions not producing anything for sale or exchange.
Giving its explanation about the units it considers “closed” or “non-operational”, the ASI explains in its introduction, “For some selected units, it is found during the survey that the unit existed in the given location and had engaged some employees during the reference period, but could not initiate production or did not produce anything during the reference period due to various reasons. These units are considered as closed units.”
Then, “there are some other units which existed in the given location, but did not engage any employee during the reference period, and also, did not initiate production or produce anything during the reference period. These units, for the purpose of ASI, are considered as non‐operative units.” However, “in case any such unit is found to be non‐operative for consecutive three years, it is assumed to be dead and marked deleted from the frame and thus, from the survey.”