Formal employment in India seems to have gained pace as data from Employees Provident Fund Organisation (EPFO) and National Pension System (NPS) has shown significant increase.
According to EPFO, despite a drop in Fiscal Year 2023-24 on year-on-year basis, number of new subscribers doubled in the said year as compared to Fiscal Year 2018-19. It was 61.1 lakhs in FY 19 which surged to over 1.31 crore in FY24. With this, net addition of subscribers during last six and half years (since September, 2017 to March, 2024) is more than 6.2 crore.
It may be noted that organisations with 20 or more employees are mandatorily required to enroll their workers under EFP. It is voluntary for organisations with less than 20 employees. Also, EPF account registration is mandatory for salaried employees with an income of up to ₹ 15,000.
Although EPFO data is for the formal sector mainly, still government says this is strong generation of employment generation overall. Last week, Prime Minister Narendra Modi highlighted the record employment generation in India in the past 4-5 years despite the looming COVID pandemic.
He threw light on a recently released detailed report on employment by the Reserve Bank of India and informed that approximately 8 crore jobs have been created in the last 3-4 years, thereby silencing the critics.
The Prime Minister also asked the citizens to remain cautious of the false narratives being spun against India’s development. “Employment is created when bridges are built, railway tracks are laid, roads are constructed, and local trains are manufactured,” he said while noting that the rate of employment in the country is directly proportional to infrastructure development.
Meanwhile, data also showed that in April this year alone, the EPFO recorded its highest-ever monthly increase of 18.92 lakh net members, marking a 10 per cent year-over-year growth. Notably, since May last year, over 55 per cent of new EPFO subscribers are in the 18-25 age group, indicating that a significant portion of new entrants into the organized workforce are youths and primarily first-time job seekers, a government official said.
In its research report, SBI brought an interesting fact by comparing EPFO data with KLEMS (K for Capital, L for Labour, E for Energy, M for Material and S for Services) Database” data. “When we took the share of EPFO with KLEMS, the FY24 share at 28 per cent is drastically lower than the average share of 5-year period (FY19-FY23) at 51 per cent. As EPFO data capture primarily low-income jobs, the declining share is quite encouraging and indicate that better paid jobs are getting available in the economy,” the report said.
National Pension System
Another indication of formal job creation is NPS. Officials said that During the 2023-24 period, the NPS registered more than 7.75 lakh new subscribers showing a 30 per cent increase from the 5.94 lakh new subscribers in the previous year.This substantial rise underscores the government’s proactive steps to timely fill vacancies in the public sector, enhancing employment opportunities and security for new entrants. “These statistics highlight the government’s effective strategies in promoting formal employment through various sectors, significantly impacting young job seekers and stabilizing employment in the public sector,” the official concluded.
