The number of first-time members joining the Employees’ Provident Fund Organisation (EPFO) picked up in November 2022, after a dip in the previous month. Provisional payroll data released by the EPFO on Friday revealed that addition of new members to the scheme rose by 17% to 0.89 million in November 2022 from 0.77 million in October last year.
The monthly addition of new members in November is, however, lower than the average of about 1.01 million for April-November this fiscal. Of course, the initial EPFO subscriber numbers are often subject to upward revisions.
New members’ additions to the EPFO began to decline from August 2022 when it dropped to 1.05 million and then fell further to 1 million in September last year.
The EPPO subscriber additions are a proxy of employment creation and formalisation of jobs. During FY21, the additions to the EPFO saw decline due to the pandemic but there was a smart recovery ion FY22. The trend has been accentuated in the current fiscal although the pace of expansion of the EPFO base has slowed a bit.
The age-groups of 18-25 years constitutes 56.6% of total of new members during the month. “This shows that first-time job seekers are largely joining organised sector workforce of the country,” the EPFO said in a statement. Among the new members, the highest enrolment is registered in the age group of 18-21 years with 0.28 million members, followed by the age group of 22-25 years with 0.23 million members.
The government uses the EPFO’s payroll data as a high frequency indicator of job creation in the formal sector. Establishments with 20 or more workers earning up to Rs 15,000 a month are mandatorily covered under the EPF Act. However, a pick-up in new members to the scheme for a single month may not be sufficient to indicate a full-fledged recovery in the labour market.
Overall, the EPFO has added 1.62 million net members in the month of November, 2022, which includes those who left the scheme and re-joined it after a change in job. Year-on-year comparison of payroll data reflects an increase of 16.5% in net membership addition in November, 2022.
About 1.12 million members re-joined EPFO membership. These members switched their jobs and re-joined the establishments covered under EPFO and opted to transfer their accumulations instead of applying for final settlement.
Month-on-month growing trend in net member addition is reflected in the states of Gujarat, Haryana, Tamil Nadu, Uttar Pradesh, Maharashtra and Rajasthan. These states together add 58.23% of the total net membership during the month.