EPFO data shows labour market on recovery path | The Financial Express

EPFO data shows labour market on recovery path

The monthly additions this fiscal are, in fact, higher than the average monthly new additions of 0.92 million in FY22, 0.71 million in FY21 and 0.9 million in FY20.

EPFO data shows labour market on recovery path
The EPFO arrives at the net number by deducting those who exited during the month from the sum of new members, and those who exited the scheme but joined during the month. (IE)

New subscribers under the social security schemes run by the Employees’ Provident Fund Organisation (EPFO) declined moderately in July over the previous month. However, addition of over 1 million subscribers in each of the first four months of the current fiscal still signals a gradual recovery of the job market.

In July, new subscribers were 1.06 million, compared with 1.1 million in June and 1.02 million each in April and May. The monthly additions this fiscal are, in fact, higher than the average monthly new additions of 0.92 million in FY22, 0.71 million in FY21 and 0.9 million in FY20.

“Out of 1.06 million new members added, approximately 57.69% are from the age group of 18-25 years of age. This shows that first-time job seekers are joining the organised sector workforce in large numbers following their education, and new jobs in the organised sector are largely going to the youth of the country,” the labour ministry said in a statement.

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Of course, fresh additions do not always mean new jobs (in many cases, it could just be a shift of jobs from the informal to the formal sector). Nevertheless, the rise in the number of new subscribers, particularly after the closure of the registration window under the job-incentivising provident fund subsidy scheme, Aatmanirbhar Bharat Rojgar Yojana (ABRY), in March this year, signals growing employment prospects, at least in the formal sector, as economic activities pick up.

Meanwhile, at 1.82 million, the net enrolment under the EPFO was the highest in July for the first four months of the current fiscal. It stood at 1.61 million in June, 1.32 million in May and 1.35 million in April. July net enrolment was up 24.48% year-on-year.

The EPFO arrives at the net number by deducting those who exited during the month from the sum of new members, and those who exited the scheme but joined during the month. In July, the number of exits at 0.4 million was the lowest in the first four months.

Labour economist KR Shyam Sundar said, “The low offtake under the MGNREGA and rising new subscribers under the EPFO together show that the labour market is witnessing a slow but sure recovery. However, this trend needs to be continued for the next two quarters for one to confirm a solid recovery in the labour market.”

According to the Centre for Monitoring of Indian Economy (CMIE), the country’s overall unemployment rate in July was 6.83%, down from 7.83% in June, 7.14% in May and 7.83% in April. The EPFO data also showed that enrolment of net female members has been 0.4 million in July, a growth of 34.84% year-on-year. “Among the total new members joining the EPFO during the month, enrolment of female workforce is recorded as 27.54%, which is the highest in the last 12 months. This indicates that female participation is rising in the organised workforce with respect to new members joining the EPFO,” the labour ministry said.

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The ministry said the month-on-month growing trend in net member addition was observed in Tamil Nadu, Delhi, Telangana, Andhra Pradesh and Madhya Pradesh. Maharashtra, Karnataka, Tamil Nadu, Haryana, Gujarat and Delhi continue to remain in the lead, adding 68.36% of total net payroll addition across all age groups during the month.

The classification of industry-wise payroll data indicates that mainly two categories — expert services (consisting of manpower agencies, private security agencies, small contractors, etc) and trading-commercial establishments constitute 46.20% of total member additions during the month.

“Comparing industry-wise data with that of the previous month, higher enrolments have been noticed in industries namely, schools, building & construction industry, financing establishment, etc,” the labour ministry said.

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