A total of 44.74 lakh jobs were added in the formal economy during September-May, 2017-18, government data showed.
Payroll count based on Employees’ Provident Fund Organisation (EPFO) showed that 7.43 lakh jobs were added in May this year. A total of 44.74 lakh jobs were added in the formal economy during September-May 2017-18, government data showed.
Of the 44.74 lakh new jobs added across age groups, 29.61 lakh or 66.1 percent were created in the 18-25 age group, considered a proxy for new jobs.
The EPFO manages social security funds of workers in the organised and the semi-organised sectors and has, at present, 6 crore members with an active contribution.
The payroll count is the difference between the number of workers who joined and exited from the EPFO’s fold and as such is the net addition to jobs. While the report gives different perspectives on the levels of employment in the formal sector, it does not measure employment at a holistic level.
The data also showed that under Pension Fund Regulatory and Development Authority (PRFRDA)’s National Pension Scheme (NPS), 5.68 lakh new subscribers were added in May-September, out of which 56,336 new members were added to the scheme during May.
Similarly, 12.75 lakh subscribers were added to the Employment State Insurance (ESIC) scheme during May.
ESIC is an integrated social security plan tailored to provide social production to workers and their dependents, in the organised sector, in contingencies, such as sickness, maternity, and death or disablement due to an employment injury. The scheme is applicable to establishments employing 10 or more workers. For health and medical institutions, the threshold limit is more than 20 workers.
As far as EPFO data is concerned, excluding the 18-25 age band, additions in the higher age groups could also suggest a greater formalisation of the economy. The payroll database by EPFO covers firms employing more than 20 workers, which are required to mandatorily make provident fund contributions at present.
In India, 99.35 percent of the firms employ less than 20 workers, as per the Sixth Economic Census of 2013-14.
According to the labour ministry, it has now been decided to publish the age-band wise estimate of all new subscribers as declared by their employers.
This data can be helpful in policymaking, planning and research work as the planners may have an idea as to what is the estimate of employees in different age band.
The new data series could lead to an overestimation given that firms may be moving many contractual employees as regular payroll staff. The estimates may include temporary employees whose contributions may not be continuous for the entire year.
According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate in India nearly doubled in the nine months through March, to hit 6.23 percent.
CMIE reckoned the number of jobs actually fell to 40.6 crore in 2018-19, down from 40.67 crore in the previous year.
