Fresh formal job creation below 1 million for third month: EPFO data

Fresh formal job creation declined sequentially in December and remained below the 1 million mark for the third consecutive month, signaling pressure in the employment market, the latest payroll data released by the Employee Provident Fund Organisation (EPFO) on Monday showed.

The number of new monthly subscribers under the Employees’ Provident Fund (EPF) declined by 14.5 per cent to 802,250 in December from 937,780 in November. In October, only 780,170 new subscribers had joined the EPF, which was the lowest monthly enrollment since May 2021.

In FY23, the number of monthly new subscribers had remained above 1 million for six consecutive months from April to September, touching a high of 1,159,350 in July.

Net payroll addition, which is calculated taking into account the number of new subscribers, the number of exits, and the return of old subscribers, however, increased by 7.7 per cent to 1,493,031 in December from 1,385,923 in November.

However, the net monthly payroll numbers are provisional in nature and often revised sharply the following month. That is why the new EPF subscriber figure has greater certitude than net additions.

Of the new EPF subscribers added in December, 446,358 are in the 18-25 age group, down by 15.5 per cent from 528,484 in November.

This is crucial because subscribers in the 18-25 age group are usually first-timers in the labour market, and this metric reflects its robustness.

Surprisingly, the number of new male subscribers fell more (14.9 per cent) than female (12.9 per cent) in December.

According to the data released by the Centre for Monitoring Indian Economy (CMIE), which conducts its own surveys, India continued to fare poorly in jobs in December, and the unemployment rate rose to 8.30 per cent in December from 8.03 per cent in November, due to a massive spike in urban joblessness. This was primarily due to an increase in labour force participation, but the economy could not generate enough jobs.

“In December 2022, employment increased essentially in rural India and the unemployed increased predominantly in urban India. This is the highest unemployment rate recorded by urban India in non-Covid times in the past five years,” the CMIE said in a statement.

The monthly data released by EPFO is part of the government’s effort to track formal-sector employment by using payrolls as an instrument. Since April 2018, the National Statistical Office has been bringing out employment-related statistics in the formal sector, covering the period September 2017 onwards, using information on the number of subscribers under three major schemes, namely the Employees’ Provident Fund Scheme, Employees’ State Insurance Scheme (ESIC), and the National Pension System..

Source: EPFO