Economic Census To Identify Sri Lanka’s Informal Sector!

Sri Lanka’s first ever comprehensive economic census is currently being conducted by t he government’s main data collection organization, the Department of Census and Statistics (DCS) with the main objective of identifying the informal economy among others.

Director General DCS, D. C. A. Gunawardena said this was the first time a census of this nature is being conducted in his department’s 67-year old history. The government has allocated over Rs.1.2 billion for the whole process and deployed as many as 1,200 officers island wide, including North and East provinces.The economic census 2013/14 which started in July 2013 by now has reached its fourth and final stage. DCS officers will visit business entities at all levels – from large scale to household based mobile businesses— in the industry, trade and services sectors for detail data collection during November and December this year.

“One of the major objectives is to figure out the SME sector, as I mentioned there is no unique definition with regard to the SMEs,” said Gunawardena.
DCS defines an industry sector SME as any establishment between 5-99 employees and trade and services entity between 3-29 employees. However there is a multitude of definitions by international and local organizations to i dentify an SME based on numerous criteria.Data gathered at the listing stage of the census shows close to two thirds (62.5 percent) of the businesses in the industry, trade and services sector are run by only one person while 31.8 percent of businesses conducted by between two to five persons.

Further, the findings shows that 75.4 percent of the businesses are located in the rural economy while only the balance 24.6 percent in urban areas.According to Gunawardena, final statistics from the economic census will be plugged into the national GDP data no sooner the ongoing process to change the base year of GDP to 2010 from the current 2002 is completed.“In terms of national GDP, we are in the process of changing our base year from 2002 to 2010. So, the work is going on now. At the moment we are also conducting some ad hoc surveys for the purpose of GDP compilation. So, once these information is available with us, we can incorporate these results (economic census data) as well,” he remarked.

Meanwhile, another challenge for the economies in any part of the world is to measure the size of underworld economic activities which occur behind close doors but no one has yet identified as to how to capture them, though they are considered to be taking place in massive scale. Senior Lecturer at the University of Colombo, Dr. S.P Premaratna said at the Sri Lanka Economic Association (SLEA) annual sessions that the inclusion of the informal sector and underworld economic activities will improve the GDP, barring productivity level improvements.

The economic census however has excluded the government and semi-government sector trade and services such as banking, as data is readily available with the Central Bank, and Gunawardena said those data would also be incorporated in to the final statistics.In 2007, Sri Lanka’s national GDP compilation was handed down to the DCS from the Central Bank, due to questions raised by many quarters about its consistency and widening variations – e.g. exchange rate, inflation.

This demonstrates that Sri Lanka does not have an independent body for data collection at the national level, and all stakeholders having to rely on a state-controlled single unit – DCS- which functions under the Ministry of Finance and Planning. Further, the small scale economic activities on transport – three wheel, van etc and boarding land renting are also among the activities that has been left out, citing practical reasons. However Gunawardena urged the public to provide factual information to the DCS officers who are visiting them, as confidentiality is assured.

“Personal level or establishment level data collected at the census is strictly confidential and those data which are in aggregated version are provided to the government for policy formation or to make decisions. Therefore DCS is expecting to collect accurate and reliable data from establishments,” DCS said in a statement.