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Payroll report shows spurt in job creation in first quarter: Govt data
The surge in new subscribers points to a recovery in the formal sector post-Covid, analysts said. The formal sector however represents just a sliver of the country’s overall economy, with over 90% of employment generated in the informal, unorganised sector, which offers little social security.
Job creation in India’s formal sector, going by new subscribers added to the country’s federally run retirement fund, rose by 40.08% in the April-June period of the current fiscal, a payroll report released by the ministry of statistics showed on Thursday.
The surge in new subscribers points to a recovery in the formal sector post-Covid, analysts said. The formal sector however represents just a sliver of the country’s overall economy, with over 90% of employment generated in the informal, unorganised sector, which offers little social security.
New subscribers of the Employees’ Provident Fund Organisation (EPFO) in April stood at 1,284,465, while in May, the pension fund saw 1,509,921 new enrolments. In June, the figure stood at 1,547,664, the payroll report showed.
Numbers in the report titled “Payroll Reporting in India: An Employment Perspective – June, 2022” also showed 46.06% growth in net employment generation in the formal sector during the April-June period going by the EPFO subscriber count. Net employment generation denotes new subscribers to the EPFO plus those who re-subscribed to the pension fund because they were re-employed, minus those who exited the EPFO during the same period.
According to the Centre for Monitoring Indian Economy, a widely cited private data firm, the country’s overall unemployment rate in July stood at 6.80%, the lowest in the last six months.
According to the Employees’ Provident Funds and Miscellaneous Provisions Act, firms with more than 20 employees must provide workers with subscription to the retirement fund manager. New subscribers to the EPFO can therefore be taken as proxy for job creation in the labour market.
“There has been a recovery for sure. But one shouldn’t merely calculate simple growth rates in job creation for very short periods. One should see if the net addition of new jobs is maintained over a 12-month period,” said KR Shyam Sundar, a labour economist with the Jamshedpur-based Xavier School of Management.
The payroll report also showed that new subscribers to the Employees’ State Insurance Corporation (ESIC) grew 45% in the first quarter of the current fiscal. “Growth in subscribers of ESIC may not always mean employment generation because the ESIC doesn’t cover the entire spectrum of the formal sector,” Shyam Sundar said.
The payroll report states that numbers of subscribers are from “various sources and there are elements of overlap”. “Therefore, the estimates from various sources are not additive,” it said.
