Monthly Labor Review Labor Costs In India S Organized-Books Pdf

Monthly Labor Review Labor costs in India s organized
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Manufacturing in India, of Indian and Chinese manufacturing The Indian statistical system. Background Unlike most developing countries India has a long his. tory of conducting surveys and maintaining statistics and. The Bureau of Labor Statistics calculates and publishes its systems have evolved and remained relevant to chang. hourly compensation costs in manufacturing for all em ing economic and political conditions Statistical systems. ployees in 32 countries and for production workers in in India can be traced back as far as the fourth century. 34 countries 4 In recent years BLS has added emerging BC when rulers maintained information on population. economies to these two series which previously had con land and agricultural production primarily to serve their. tained only data from developed countries Although In own needs In general data collection was neither highly. dia has been recognized among developing economies for developed nor well coordinated until after India gained. the abundance and quality of its statistics compensation its independence in 1947 when the need for more ad. estimates for India s manufacturing sector cannot yet be vanced economic planning arose 6 By the early 1950s the. incorporated into the main BLS comparative compensa country had established the Central Statistical Organisa. tion series because of limitations such as a lack of timely tion CSO which coordinates the state statistical offices. data publication absence of data on recorded work hours and the National Sample Survey Organisation which. and a likelihood of many businesses reporting innacurate conducts large scale sample surveys 7 These two entities. data Instead BLS hopes to present data for India as a spe are currently housed under the Ministry of Statistics and. cial supplemental series an approach similar to that used Programme Implementation. for China another country for which BLS has identified a In the 1990s India s government and its markets under. number of data quality issues and a country to which In went changes that put new pressures on the statistical sys. dia is often compared 5 Because these two countries have tem The closed economy driven fundamentally by public. become important forces in the global economy there is sector activity began opening up and relying more heavily. value in studying the compensation data for both coun on the private sector In January of 2000 the government. tries to the extent possible created a formal body the Rangarajan Commission to. This article presents for the first time BLS estimates of review the statistical system and all the official statistics. compensation in the organized sector on an estimated it produces 8 In response to the group s recommenda. hourly basis in Indian rupees and in U S dollars for the tions India has been working to create a system that is. period from 1999 to 2005 The limitations of the esti more centralized consistent timely credible and reliable. mates also will be discussed The analysis in this article One major initiative is the India Statistical Strengthening. uses information published by India s national statistical Project which calls for creating and maintaining a nation. organizations the primary source being the Indian An al business register to allow for more scientific periodic. nual Survey of Industries ASI which collects employ business surveys improve the training of employees who. ment and compensation data for the country s organized work with statistics and increase resources available to. manufacturing sector the states 9 The experience and history that India has with. Publication of data from India, The Bureau of Labor Statistics has been a leader in com hourly compensation costs at this time This article is in. piling international comparisons of hourly compensation tended as the first step toward developing the measures nec. of manufacturing employees over a wide range of countries essary to include India in the regular comparisons series that. Despite its large and growing importance in world manu currently comprises 36 countries Because of the difficulties. facturing India has not been included in the comparisons in creating hourly compensation estimates for India the. because of difficulties in obtaining and interpreting that short term plan is to publish updates for this country with. country s data and because of concerns about the quality of appropriate annotations separate from the regular series of. the data Although this Monthly Labor Review article greatly international comparisons of hourly compensation This is. facilitates understanding of Indian compensation statistics similar to how BLS treats hourly compensation estimates de. many problems with data availability coverage and reliabil veloped for China The final goal of moving India and China. ity remain as described in the article Therefore the Bureau into the regular comparisons series would of course remain. does not plan to include India in its regular comparisons of intact. 4 Monthly Labor Review May 2010, respect to collecting data increases BLS s confidence in organized manufacturing sector for all employees and for. the credibility of the Indian statistical system as a reliable production workers for each fiscal year which in India. source of data and information Still India acknowledges runs from April 1 to March 31 15 Although the survey has. opportunities for improvement and a need to respond to been conducted since 1960 the BLS hourly compensation. its rapidly changing economy costs series for India s organized manufacturing sector. does not begin until 1999 primarily because of industry. Organized sector versus unorganized sector classification changes that occurred before that year and. would have compromised historical comparisons, Although detailed data are available for India s organized Beginning with the ASI of 1998 99 which is survey. sector they are less plentiful for India s unorganized sec notation for the fiscal year from April 1 1998 to March. tor Understanding how these two sectors differ is impor 31 1999 data were classified according to the National. tant in analyzing India s labor statistics Industrial Classification NIC of 1998 which is based on. India s organized and unorganized sectors generally the International Standard Industry Classification sys. correspond with what economists call the formal and tem ISIC Rev 3 In 2004 the NIC was modified and its. informal sectors in other countries 10 The official distinction changes were captured in the ASI of 2004 05 henceforth. between the organized and unorganized sectors lies in ASI 2004 05 However BLS analysis shows that the. whether businesses register with the government and differences between NIC 1998 and NIC 2004 do not affect. regularly maintain prescribed records According to the year over year comparisons between the BLS estimates. National Accounts Statistics for India the organized sector for ASI 2004 05 and those for previous survey periods. comprises enterprises for which statistics are available from Ultimately BLS adjusts the Indian manufacturing data to. budget documents reports or other such documents In make them comparable with data that were calculated in. contrast the unorganized sector refers to those enterprises a manner consistent with the North American Industry. whose activities or collection of data is not regulated under Classification System NAICS. any legal provision or enterprises that do not maintain any The ASI is conducted every year by mail and covers 31. regular accounts 11 Not surprisingly there are relatively few of the 35 states and union territories that make up In. data series that cover the unorganized sector Individual dia The four areas not covered likely have little impact on. establishments tend to be small typically employing fewer measurement because of their small size 16 Because the. than 10 persons and many of these enterprises have no survey frame includes all establishments that have regis. hired workers and operate primarily for family sustenance tered with the Indian states the ASI sample is believed. The two sectors also differ in how they contribute to to be representative of the organized manufacturing sec. India s thriving manufacturing industry which accounted tor 17 Although the data are thought to be characteristic of. for approximately 16 percent of India s real GDP from firms in the organized sector there are important caveats. 2000 to 2006 12 When measured by output the organized ASI survey data are presented in raw form without adjust. sector dominates producing approximately two thirds of ments to the ways that employers reported them there. the country s manufacturing output 13 The organized sec are no attempts to contact employers to fill in missing or. tor s average annual rate of growth was stronger than that incomplete data or to correct for data that seem out of. of the unorganized sector 13 1 percent compared with 9 9 line with other data In addition although participation. percent When measured by employment levels however is compulsory by the Collection of Statistics Act of 1953. the unorganized sector dominates According to estimates penalties for noncompliance are not enforced frequently 18. from national data close to 80 percent of manufacturing Because of the problem of nonresponse and because no. employees work in the unorganized sector 14 From either attempt is made to impute values for employers that do. perspective the unorganized sector must be regarded as not respond the results are dependent upon which estab. an important part of Indian manufacturing and BLS is lishments return the survey questionnaire These problems. currently conducting additional research on it This arti cause the data to be less reliable than survey data that are. cle s primary focus however is the organized manufactur adjusted by the receiving statistical agency or data that are. ing sector weighted to be representative of the entire survey popula. The Annual Survey of Industries The ASI covers manufacturing activities as defined by. the Indian Factories Act as any of the following five pro. The ASI collects employment and earnings data from the cesses. Monthly Labor Review May 2010 5, Manufacturing in India.
i making altering ornamenting finishing packing on whichever factories respond to the survey in any given. oiling washing cleaning breaking up demolishing year General trends can be compared across years for all. or otherwise treating or adapting any article or sub of manufacturing and for subsectors within manufactur. stance with a view to its use sale transport delivery ing but ASI data on industries with 4 digit NIC codes. or disposal or generally are not comparable from one year to the next. ii pumping oil water or sewage or, iii generating transforming or transmitting power or The growth of contract labor In 2005 06 the most recent. fiscal year for which data from the ASI are available 8 7. iv composing types for printing by letter press lithog million people were covered in the survey and reported. raphy photogravure or a similar process or bind as employed in India s organized manufacturing sector 22. ing books or See table 1 As mentioned earlier there are difficulties. v constructing reconstructing repairing refitting fin in estimating trends in employment by use of data from. ishing or breaking up ships or vessels 19 the ASI because the survey results are not representative of. The manufacturing sector is defined differently in the the entire organized manufacturing sector The National. BLS hourly compensation series Under the 2007 NAICS Sample Survey Organisation does not publish response. manufacturing comprises establishments engaged in the rates and as mentioned earlier data from the ASI are not. mechanical physical or chemical transformation of ma adjusted to account for nonresponse 23 Despite these limi. terials substances or components into new products 20 tations it is possible to discern from the data that some. The assembling of component parts for manufacturing is changes in the makeup of the Indian organized labor. considered manufacturing except in cases in which the force are occurring. BLS produces data for two groups of people in its in. activity is classified in construction In order to reconcile. hourly compensation costs calculated by use of the NA ternational series on hourly compensation in manufactur. ICS definition of manufacturing with those calculated by. ing all employees and production workers 24 Production. use of the ASI definition BLS must remove from the raw workers are defined as those employees who are engaged. Indian data all publishing activity as well as industries en in fabricating assembly and related activities material. gaged in items ii and iii of the Factories Act definition handling warehousing and shipping maintenance and. of manufacturing 21 repair janitorial and guard services auxiliary production. or other services closely related to the aforementioned ac. Data features tivities Working supervisors generally are included ap. prentices and other trainees generally are excluded The. Knowledge of ASI data reporting practices and the salient category all employees comprises production workers as. features of the ASI data are important to understanding well as other workers employed full time or part time in. the estimates presented in this article and their limita an establishment during a specified payroll period Tem. tions Trends in employment including the growth of porary employees are included People are considered. Compensation costs in India s organized manufacturing sector were 91 cents per hour for all employees in 2005 this amounted to about 3 percent of hourly labor costs in the U S manufacturing sector but was above BLS estimates of labor costs in China Jessica R Sincavage is a supervisory economist in the Division of Interna tional Labor Compari sons Bureau of Labor Statistics Carl Haub is

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