 "Jobs, employment, hiring")
After suffering a massive jolt in the wake of the Covid pandemic, labour markets in India show signs of a steady recovery as fresh formal job creation grew for the second straight year to reach a four-year high in FY23. These are the findings from the latest payroll data released by the Employee Provident Fund Organisation (EPFO) on Saturday.
The number of new subscribers that joined the Employees’ Provident Fund (EPF) increased by 5.8 per cent to 11,498,453 in FY23 from 10,865,063 in FY22, a Business Standard analysis of the payroll data showed. This is the highest number of new subscribers joining the social security organisation in a year since FY19, when 13,944,349 new subscribers had subscribed to it.
The EPFO data is part of the government’s effort to track formal-sector employment generation in the country by using payrolls as an instrument.
Besides, the net payroll addition, which is calculated by taking into account the number of new subscribers, the number of subscribers who left, and the return of erstwhile subscribers also rose by 13.21 per cent to 13.85 million in FY23. This is the greatest net addition seen by the EPFO in a year since FY19, from the time it started releasing the payroll numbers in April 2018.
However, the net monthly payroll numbers are provisional and often undergo revision. That is why the new EPF subscriber figure has greater certitude than net additions.
More women are now gaining formal employment as their share among new subscribers has grown steadily over the last five years to 26 per cent from 21 per cent in FY19.
Similarly, the share of young people (18-28 age group) getting formal jobs has also risen steadily, to 66.5 per cent in FY23 from 62.1 per cent in FY21. This is crucial because subscribers in this set are usually first-timers in the labour market, and this metric reflects its robustness. Meanwhile, the ‘29-35 age group’ and ‘more than 35 age group’ had seen a steady decline among the new subscribers in the same period.
Meanwhile, the share of young subscribers (18-28 age group) among net payroll additions has dipped significantly to 62.9 per cent in FY23 from 76.8 per cent in FY19, reflecting that young subscribers find it difficult to regain formal employment, once they decide to switch jobs. It may take quite some time before they regain formal employment.
“Job creation is still a challenge in the Indian labour markets. Though EPFO numbers are encouraging, they cover a very small fraction of the Indian working class. The vast swathes of the country are engaged in low productivity, low-paying, low-skilled jobs in the vast informal sector, which is not covered by these [surveys] and is thus not reflected in the official figures. It is imperative that the government facilitates and kick-starts meaningful job creation in core sectors like manufacturing, construction, services etc so that the vast majority of young people actually gain meaningful employment,” a labour economist said, requesting anonymity.
