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OpinionsFormal Job Creation Declines Further In India

Formal Job Creation Declines Further In India


By Dr. Gyan Pathak

The latest Employment Provident Fund Organisation (EPFO) data reveals the great distress in which Indian labour market is presently undergoing. It shows that the formal job creation has been declining sharply, a ground reality, which is in sharp contrast to the PM Narendra Modi's claim in Rozgar Melas that his government has been distributing jobs and appointment letters and creating large number of job opportunities through appropriate policies.

The EPFO provisional data released on February 2023, showed that there was a sharp decline of 14.5 per cent in payroll enrolment in December 2022 compared to November. The month of October had registered the lowest monthly enrolment since May 2021. Only a little improvement was registered in November, and that too waned in December dashing the hope of the people, particularly the unemployed who were in search of decent salaried jobs.

The actual number of new formal jobs, as reflected in the new monthly subscribers enrolment under the EPF, went down in December 2022 to 8,02,250 as against 9,37,780 a month earlier in November. In October, new enrolments were only 7,80,170. It was a great fall from 10,59,724 in April 2022, and from 11,59,350 in July 2022.

Of the new EPF subscribers added in December, a total of 446,358 are in the 18-25 age group, down by 15.5 per cent from 528,484 in November. It shows that job opportunities for the workforce entering for the first time in job market are declining.

The data also springs a surprise on gender development. The number of new male subscribers fell more (14.9 per cent) than female (12.9 per cent) in December 2022. It is a matter to be watched closely in coming months.

It must be noted that this data is provisional and is continuously revised, and when final data comes, it proves to be provisionally overestimated. We can take example of the year 2021-22, for which we have both provisional data and the annual report. There is a big difference – provisional data tried to show formal employment rising by almost 20 million while annual report tabled in the Parliament of revealed a fall of 2.58 million, which was a fall of about  5.3 per cent. The provisional data therefore must be seen in this background. EPFO has started bringing out formal employment using payroll since April 2018, covering the period since September 2017.

The data shows that enrolment of workforce less than 18 years of age fell to 5676 in December from 6185 in November, and 9630 in June 2022. In the age group 18-21 it fell to 2,77,343 in December from 3,29,898 in June this year. Among 22-25 years of age, it fell from 3,73,843 to 3,60,188 during this period.

It shows that India is failing to provide formal jobs to the people between age group 15-25, which are generally fist time job seekers. For the workforce above 26 and above the data shows little improvement in enrolment, which may reflect the continuation of the earlier enrolment in the EPF.

The data pertaining to establishments remitting fist ECR in the moth shows a figure of only 3140 in the country, which was 5696 in May 2022. It shows that the number of companies providing fresh employment to the workforce has sharply declined.

December data shows that 3,83,673 members exited from EPF while 8,02,250 were newly enrolled. The number of exited members who rejoined and resubscribed was 10,74,454. The Net payroll members were thus 14,93,031. These data only show how little number of workforce is actually in formal jobs in the county where according to a 2020 data 90 crore (about 67 per cent) people were in the working age group of 15-64 years.

Since September 2017, the date from which the numbers are tracked, the number of new members who joined and exited were 1,20,625. The number fo exited members who rejoined and resubscribed were 5,96,443. Thus, net new EPF subscribers since September 2017 were only 12,78,068. This shows the continued volatility in the Indian job market, especially in the formal employment.

The data also shows big state wise differences in new enrolments. Tamil Nadu enrolled highest number of new subscribers (1297) under 18. Five top performing states in this or all other categories were Tamil Nadu, Maharashtra, Gujarat, Haryana, and Karnataka.

Worst performing states in new enrolments under 18-category included that went into (-1) while Arunachal Pradesh, Manipur, Andaman &Nicobar, Nagaland and Mizoram had zero new enrolments. Tripura had 10 and and had only nine enrolments. These states are lagging behind in almost all age categories.

Export services, textiles, trading-commercial establishments, and engineering products, building and construction sectors were top new enroller sectors in all age groups.

The EPFO data shows formal employment at very low level and that too was declining. Obviously, informal jobs are on the rise. One should also note that unemployment rate in the country in December was as high as 8.3 per cent as per only available data by CMIE, while the government data has not yet been made  available to the people.

(IPA Service)


The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.


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