Job creation or job formalisation, what does the Employees' Provident Fund Organisation (EPFO) data mean? The question has received contradictory answers.
Job creation or job formalisation, what does the Employees’ Provident Fund Organisation (EPFO) data mean? The question has received contradictory answers. Even as Prime Minister Narendra Modi quoted the EPFO and National Pension Scheme (NPS) data in the Parliament to claim job creation to the tune of 1 crore, the newly-appointed chief statistician Pravin Srivastava contradicted the popular opinion by saying that the data never “talked about job creation”.
Meanwhile, the latest set of data released on Saturday showed that the EPFO subscription slowed down in August. Moreover, EPFO also revised previous months’ data significantly revised, both upwards and downwards. The EFPO data was revised downwards for two months, while upwards for rest of the month between September 2017 and July 2018, showing its provisional nature.
The EPFO data was revised downwards for the month of September 2017 by nearly 11.9% and March 2018 by 9.2% as compared with previous month’s estimates. October 2017 witnessed highest upward revision of 15.7%.
Speaking with FE Online earlier, Soumya Kanti Ghosh — one of the architects behind EPFO payroll data collection — had said that the process is at an early stage and will require some more time to get fully streamlined. He said that there may have been an overestimation of the data due to the delayed removal of retirees from the list and other kinds of backlogs.
Chief Statistician Pravin Srivastava, in an interview with The Indian Express earlier this week, reiterated what was always mentioned with the EPFO data release. According to the EPFO, the data gives “different perspectives” on the levels of employment in the formal sector and does not measure “employment at a holistic level”.
On similar lines, Srivastava said, “I don’t think we ever talked about job creation. It was trying to say that these people have entered the formal market. They were not unemployed, they need not have been unemployed earlier.”
As EPFO payroll data series completed a 12-month period, top economists took to Twitter to discuss various aspects — and most importantly, does it mean job creation?
This is real time EPFO data. Out of 73 lakhs, 30 lakhs is existing payroll (formalisation at 11 lakh and second job at 19 lakh) and 40 new payroll. Ideally, second job is also a new job, not first time. @subhomoyb @TVMohandasPai @thesuniljain @dravirmani pic.twitter.com/JDd1pmY1Fy
— Soumya Kanti Ghosh (@kantisoumya) October 23, 2018
EPFO data indicates following: Sept 17 – July 2018 for those <=21 years annual rate of 2.43m; the latest Sept.17-Aug 18 data (12 mths) new jobs – 2.61m; this age-group has mostly new jobs, unless you believe youngsters are job hopping – if so, jobs are robust! @CMIE @kantisoumya https://t.co/Kq3fcuqJP9
— Surjit Bhalla (@surjitbhalla) October 23, 2018
So for the periods you have analysed, how many were (a) self employed people who started working for the formal sector (b) How many were Working for the first time? A small (quarterly?) table would prove your point!
— Arvind Virmani (@dravirmani) October 23, 2018
In April this year, the country for the first time introduced monthly payroll reporting with the aim of facilitating analysis of new and continuing employment. The EPFO takes into account companies with more than 20 individuals on the payroll.