Discuss the significance of the Annual Survey of Industries for national accounts and evidence-based industrial policy. What are its limitations in capturing the informal sector?

MoSPI conducts the Annual Survey of Industries (ASI) under the Collection of Statistics Act, 2008. It is India's main source of data on registered manufacturing [3]. ASI 2024-25 covered 2,66,931 factories employing about 2.10 crore persons [1]. It is essential for the formal sector, but it leaves out most of India's manufacturing workforce.

Significance for National Accounts

• ASI data feed manufacturing GVA into national GDP and State GSDP estimates [3].
• It follows the establishment approach with NIC 2008 classification. This gives comparable estimates by industry and by State [3].
• Unit-level data are now released, which improves transparency and lets researchers verify the estimates [3].

Significance for Industrial Policy

• Sectoral targeting: the top five industries produce more than 45% of GVA. They are basic metals, motor vehicles, chemicals, pharmaceuticals and food [1]. This guides schemes such as PLI.
• Regional balance: five States produce more than 54% of GVA [3]. This is evidence for promoting industry in lagging States.
• Jobs versus capital: total fixed capital rose 10.54%, but fixed capital per person engaged rose only from ₹23.61 lakh to ₹24.34 lakh [1][2]. Growth has not replaced workers with machines.
• MSME dualism: 78.69% of factories hold only 10.55% of fixed capital [3]. Credit and technology support for small units should be designed around this.

Limitations in Capturing the Informal Sector

• Narrow coverage: ASI counts only factories under Sections 2m(i)/(ii) of the Factories Act (10+ workers with power, 20+ without) [4]. ASUSE counts about 3.4 crore workers in unincorporated manufacturing, far more than ASI's 2.10 crore [5][1].
• The two surveys do not match: ASI uses April–March while ASUSE uses October–September. Units that cross the size limit may be counted twice or missed [3][5].
• Weak sampling frame: ASI samples from the factory lists kept by State Chief Inspectors of Factories, so its quality varies from State to State [3].
• Labour Codes: the OSH Code raises the threshold to 20/40 workers [6]. Smaller units may drop out of ASI, which would look like a decline in the data when it is really a change in definition.

ASI is the backbone of formal-sector industrial statistics, but on its own it gives an incomplete picture. The NSO should keep its own sampling frame and publish results on both the old and new definitions during the transition. It should also combine ASI with ASUSE and PLFS. Together, these would give a complete statistical base for SDG 9's goal of inclusive industrialisation.