EPFO adds over a million new subscribers in June for 3rd month in a row

More than a million people have joined the formal workforce for the third consecutive month in June, according to the fresh payroll data released by the Employees’ Provident Fund Organisation (EPFO) on Thursday.

New EPF subscribers increased marginally to 1,054,261 in June from 1,007,441 in May 2022 and 1,009,689 in April, according to data published by the National Statistical Office (NSO). In the June quarter, while 2.27 million new subscribers are men, 0.8 million are women.

Of the new EPF subscriber additions in June, 598,941 are in the 18-25 age group, considered crucial as they are seen as first timers in the labour market.  However, the net payroll additions, which is calculated taking into account the new additions, number of exits, and the return of old subscribers, was pegged at 1.8 million in June as against 1.5 million in May. 

The number of subscribers that exited the EPF scheme in June sharply declined to 393885 from 753091 in May.

To be sure, the monthly payroll numbers are provisional in nature and their number fluctuates. But the new EPF subscribers figure is accepted with more trust than the net additions as the later fluctuates more.

The data released is part of the government’s effort to track formal sector employment in the country by using payrolls.

The EPF is a mandatory savings scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is managed under the aegis of Employees’ Provident Fund Organization (EPFO). It covers every establishment in which 20 or more persons are employed and certain other establishments which may be notified by the central government even if they employ less than 20 people each, subject to certain conditions and exemptions in the Act.

The pay ceiling is Rs 15,000 per month. Those drawing pay above Rs 15,000 are exempt or can be enrolled with some permission or on voluntary basis. The number of members subscribing to this scheme gives an idea of the level of employment in the formal sector.

Since April, 2018 NSO has been bringing out the employment-related statistics in the formal sector covering the period September 2017 onwards, using information on the number of subscribers who have subscribed under three major schemes, namely the Employees’ Provident Fund (EPF) Scheme, the Employees’ State Insurance (ESI) Scheme and the National Pension Scheme (NPS).

The number of newly registered employees and paying contributions during June for the ESI scheme increased marginally to 1,547,664 from 1,509,921 in May.

In June, new subscribers added to NPS declined marginally to 58,425 from 60,926 in May.