 "EPFO")
The number of fresh formal jobs created in a month declined to its lowest level since the second wave of Covid-19 pandemic hit India, signaling a significant downturn in the formal labour market in the country.
In March, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) sequentially declined by nearly 4 per cent to 747,000 from 777,700 in February, according to the latest monthly payroll data released by the Employees’ Provident Fund Organisation (EPFO) on Monday.
However, the labour ministry didn’t release revised monthly data for previous months of FY24 by the time of going to the press.
In May 2021, fewer fresh formal employees than in March (649,618 subscribers) had joined the EPF. The EPFO data is considered crucial as only the formal workforce enjoys social security benefits and is protected by labour laws.
Of the total 747,000 new EPF subscribers in March, the share of young people belonging to the 18-25 age group slightly increased to 56.83 per cent (424,520) in March from 56.3 per cent in the preceding month. This is crucial because subscribers in this age group are usually first-timers in the labour market, thus reflecting its robustness.
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Besides, the share of women among the total new subscribers also increased marginally to 26.7 per cent (200,000) during the month as compared to 26.35 per cent (194,007) in February.
Meanwhile, the net payroll additions — calculated by taking into account the number of new subscribers, the number of subscribers that exited, and the return of old subscribers to the social security organisation — decreased by nearly 7 per cent to 1.44 million in March from 1.54 million in February.
The net monthly payroll numbers are, however, provisional in nature and are often revised sharply the following month. That is why the new EPF subscriber figure is considered more reliable than net additions.
“The payroll data highlights that approximately 1.18 million members exited and subsequently rejoined EPFO. These members switched their jobs and re-joined the establishments covered under the ambit of EPFO and opted to transfer their accumulations instead of applying for final settlement thus, safeguarding long-term financial well-being and extending their social security protection,” said the labour ministry in a statement.
However, the data by the private agency Centre for Monitoring Indian Economy (CMIE), which conducts its own Consumer Pyramids Household Survey (CPHS), showed that the labour markets fared slightly better in March as the unemployment rate in India declined to 7.6 per cent from 8 per cent in February, primarily aided by a fall in the number of people looking for work.
“Unemployment rate dropped in March alongside a fall in labour participation rate (LPR) as well as employment rate. LPR in India inched down to 41.1 per cent in March, from 41.4 per cent in the previous month,” the CMIE said in a statement.
The monthly payroll 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, sharing data from September 2017 onwards, using information on the number of subscribers under the EPF Scheme, Employees’ State Insurance Scheme, and the National Pension System.
