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Formal job creation slowed in May after recovering slightly at the turn of the fiscal year in the previous month, according to the latest payroll data, released by the Employees’ Provident Fund Organisation (EPFO) on Thursday.
The number of new monthly subscribers under the EPF declined by close to 1 per cent to 883,176 in May from 891,974 in April.
Despite the slowdown, the share of young subscribers (18-28 age group) among the new ones increased to 589,777 (66.8 per cent) in May from 575,799 (64.6 per cent) in April. This is crucial because subscribers in this age group are usually first-timers in the labour market, and this metric reflects its robustness.
However, the share of women saw a marginal decline to 221,079 (25.03 per cent) in May from 236,510 (26.5 per cent) in the previous month.
Lohit Bhatia, president, Indian Staffing Federation (ISF), said labour markets in the first quarter were slow to pick up because firms were gauging their strategies for the rest of the year.
“The month of May coincides with the onset of monsoons and there is a reverse migration to rural areas, thus leaving a lot of people out of the social security organisation’s purview. Moreover, the festival season is some time away, and firms are usually lacklustre in hiring people at this time,” he added.
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Net payroll addition, which is calculated taking into account the number of new subscribers, the number of exits, and the return of old subscribers, however, increased by 6 per cent to 1.63 million in May from 1.53 million in April.
However, the net monthly payroll numbers are provisional in nature and often revised sharply the following month. That is why the new EPF subscriber figure has greater certitude than net additions.
Besides, the data released by the Centre for Monitoring Indian Economy (CMIE), which conducts its own surveys, showed the unemployment rate had, however, fallen to 7.7 per cent in May from 8.11 per cent in April, because there was a decline in the labour force participation rate (LPR) to 39.6 per cent from 40.7 per cent in April and the decline in labour participation was considerably high in rural India compared to urban India.
“This drop in the LPR in May was expected because April witnessed a large number of people entering the labour force but only a small share was able to secure employment in the month. This was bound to discourage many from searching for work in May. As a result, the labour force shrank in size from 453.5 million to 441.9 million,” it said in a statement.
The monthly data released by the EPFO is part of the government’s effort to track formal-sector employment by using payrolls as an instrument. Since April 2018, the National Statistical Office has been bringing out employment-related statistics in the formal sector, covering the period September 2017 onwards, using information on the number of subscribers under the Employees’ Provident Fund Scheme, Employees’ State Insurance Scheme, and the National Pension System.
