Output, Value Added and Employment in the Small Scale Textile Industry

Seemin Anwar

Abstract


The small scale manufacturing sector is in many ways the
step-child of Pakistan's national income accounts. A number of sample
surveys of the output and employment characteristics of small industries
have been conducted, but no attempt has been made to apply these
surveys, in a systematic fashion, to the measurement of the growth of
output of this sector. In the absence of better information, compilers
of Pakistan's national accounts simply assume that the small scale
sector's contribution to the national product grows at the same rate as
the population. However, given the rapid structural changes in large
scale industry and the sharp fluctuations in the past decade in the rate
of increase in the gross national product, it is unlikely that the small
scale sector grew at such a uniform rate. The small scale manufacturing
sector encompasses a wide array of highly differentiated economic
activities and separate estimates of the value added annually by each of
these activities is not feasible, in large part because the
establishments in this sector rarely keep systematic records even for
major items such as sales or employment. Even if firms kept records, it
would be extremely difficult to monitor the thousands of existing
establishments, much less keep track of firms leaving or entering the
sector. Thus, any effort at sampling or regular census-taking in the
small scale sector is likely to provide insufficient information from
which to construct an annual index of production.

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DOI: https://doi.org/10.30541/v14i1pp.120-134

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