Formal job creation drops 7% in August: EPFO data

The number of fresh formal jobs created under the Employees’ Provident Fund Organisation (EPFO) in August dropped 7.1% from July levels, as per the official data released by the Ministry of Labour & Employment on October 25. As per the provisional payroll data of EPFO, net job addition declined to 16.94 lakh in August from 18.2 lakh in July, while it stood at 18.3 lakh in June, 16.8 lakh in May, and 15.3 lakh in April. However, a year-on-year comparison of payroll data showed that net EPFO subscribers grew 14.4% as compared with August 2021, when the economy was recovering from the second wave of the Covid-19 pandemic.

As per the official data, a total of 9.87 lakh new subscribers were enrolled under EPFO in August 2022, as against 11.20 lakh subscribers in July 2022, registering a decline of 11.86%.

In a similar trend, 1.46 lakh subscribers were added under Employees' State Insurance Corporation (ESIC) during the month under review, down 8% as compared to 1.59 lakh subscribers in July. It had posted a net 1.56 lakh new additions in June, 1.51 lakh in May, and 1.28 lakh in April.

The new National Pension Scheme (NPS) subscribers also fell marginally to 65,543 in August compared to 66,014 subscribers in July. However, the NPS addition during the month under review was higher than 58,425 in June, 60,926 in May, and 64,569 in April.

The data showed that out of the 9.87 lakh new EPFO enrolments, nearly 58% were from the age group of 18-25 years. Gender-wise, the enrolment of net female members stood at 3.63 lakh, which was up 22.6% as compared to the same month last year.

About 7.07 lakh net subscribers exited but re-joined the EPFO by transferring their funds from the previous Provident Fund (PF) account to the current PF account, instead of claiming for final withdrawal, the data highlighted.

State-wise comparison of payroll figures highlighted that the establishments covered in the states of Maharashtra, Haryana, Gujarat, Tamil Nadu, and Delhi continued to lead by adding around 11.25 lakh subscribers during the month, which was around 66.4% of total net payroll addition across all age groups. On a month-on-month basis, Uttar Pradesh, Jharkhand, West Bengal, Odisha, and Bihar witnessed a growing trend in terms of net member addition.

Meanwhile, the latest data released by the private economic think-tank Centre for Monitoring Indian Economy (CMIE) showed that labour market conditions improved substantially in September 2022, with the unemployment rate falling to 6.4% from 8.3% in August, which was the lowest in the past four years since August 2018.

“The fall in the unemployment rate was achieved along with an increase in the labour participation rate (LPR). The LPR inched up from 39.24% in August to 39.32% in September. As a result of the increase in the LPR and a simultaneous fall in the unemployment rate, the employment rate rose from 35.99% in August to 36.79% in September 2022. The employment rate, which is the proportion of the population of 15 years or more that is employed, is the most important economic indicator,” CMIE said in a statement.

The CMIE report highlighted that the employment rate at 36.79% is still low compared to the 37.1% recorded in April and May 2022, or the 39.5% of 2019-20 and the over 40% levels before that.