Payroll: EPFO says June data on par with pre-crisis level, butrejig raises questions

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August 28, 2020 8:00 AM

Nearly 81% of the addition to the June payroll came from the top ten industries, including expert services; building and construction; electronics, mechanical or general engineering products manufacturing; engineering; and trading or commercial establishments. At 53%, the maximum addition came from ‘expert-services’ providers.

Payroll data rejig by the EPFO isn’t just a transient consequence of the disruptions to the job market caused by Covid-19 and the lockdown.

Net addition to the Employees Provident Fund (EPF) subscriber base marginally overshot the monthly average of 2019-20 in June 2020 (see chart), indicating a sharp and resilient recovery after hitting the nadir in April, official figures put out by the retirement body show. However, even as these figures are treated as proxy of jobs created (rather, they represent the pace of formalisation of jobs), the fact that the EPFO undertakes frequent and drastic revisions of the data make them appear less foolproof, if not suspect.

For example, the April 2020 payroll addition was first reported in June at 1.33 lakh, but was revised to a little over a lakh in July and further to just 20,164 in the latest revision. Similar volatility has always marred the credibility of EPF payroll data, which the body started releasing on a monthly basis effective April 2018.

Payroll data rejig by the EPFO isn’t just a transient consequence of the disruptions to the job market caused by Covid-19 and the lockdown. It had been in vogue even earlier; for instance, first-time contributors to the EPF in March 2018 were first reported in May that year to count 6.13 lakh; later, in July 2019, the number was revised to just 55,831, down 91%. Examples like these abound.

As per the latest EPFO data, four industrialised states – Maharashtra, Karnataka, Gujarat and Tamil Nadu – contributed nearly half of the total net payroll additions in June 2020 of 6.55 lakh. And the maximum enrollments were at the entry-level jobs – between them, the 18-21 and 22-25 age groups made up almost half of the payroll additions in the month. Also, most of the additions were from low-wage, blue-collar jobs in the category of “expert services”.

Nearly 81% of the addition to the June payroll came from the top ten industries, including expert services; building and construction; electronics, mechanical or general engineering products manufacturing; engineering; and trading or commercial establishments. At 53%, the maximum addition came from ‘expert-services’ providers.

Net addition to the payroll data is new subscribers plus those rejoined minus those stopped contributing.

In term of establishments remitting their first electronic challan cum return (ECR) in the month concerned, the average monthly figure was 5,073 in 2018-19 and 4,394 in 2019-20. The figure dropped to just 820 in April and then recovered to 1,802 in May and further to 2,390 in June.

It may be noted that while June payroll addition was at par – slightly higher in fact — with the monthly average in 2019-20, the establishments filing ECR newly in June were far lower than the monthly average in 2019-20, Again, the accuracy of the data look doubtful.

According to EPFO, “The data is provisional as updation of employee’s records is a continuous process and gets updated in subsequent month/s.” Also, it said, “the estimates may include temporary employees whose contributions may not be continuous for the entire year”.

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