Just 15% access institutional finance

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: those units that are not registered. What are the best sources of data on small sector that can throw light on: simple count of the number of small businesses spread state wise, businesses in various geographical areas, urban/rural, data on output and employment, sources of finance etc.? Has the policy of directed lending been instrumental in reducing poverty in India?

—D Donaldson through email

There are four sources of data that you may consider: national accounts statistics (CSO), economic census (CSO), national sample survey on India’s informal sector (NSSO) and all India census of SSI (DC-SSI). In my opinion, the last would suit your requirement the most. There have been three national census so far on SSIs: 1973-74 (reference year 1972); 1990-91(reference period 87-88) and 2002 (reference year 2001-02).

These are conducted by the development commissioner of SSIs. The census results provide information on a number of units, state/district-wise, investment, employment, production etc. Interestingly, approximately half of the units covered are rural enterprises.

The caveats, however, are: one, that SSI census excludes other important sectors— part of traditional industries such as khadi and village industries, handlooms, handicrafts, sericulture, coir sectors, as well as the powerloom sector. All of these sub-sectors are being regulated under different administrative set-ups.

Second, the SSI sector is composed of registered (with authorities) and unregistered units. The SSI Census covers registered units but data for unregistered units are derived through sample surveys. Both are subsequently clubbed to estimate the size of the entire SSI sector.

With regards to the impact of India’s ‘social banking’ on reduction of poverty, I think linking poverty reduction to social banking alone could be too ambitious. I fear neither gro-und realities bear out this fact nor the corroborative data. For example, even in the latest census of SSIs (2001-02), the number of units with access to any kind of institutional credit is below 15%.

More important, the number of unregistered small-scale units having any form of institutional/ bank credit is less than 4%! Almost the entire smaller segment of small sector relies on informal sources of finance rather than banks. The number is, no doubt, far less in the household non-farm sector in villages.