Fresh formal job creation falls below 1-million mark in August: EPFO

The number of fresh formal jobs created in August fell below the 1-million mark for the first time in five months, declining 11.9 per cent from July levels, according to the latest payroll data released by the Employees’ Provident Fund Organisation on Thursday.

New Employees’ Provident Fund (EPF) subscribers in August saw a sharp decline to 986,850, from 1,119,698 in July. Enrolment of new female subscribers fell faster (12.5 per cent) than their male counterparts (11.6 per cent) in August, compared with the previous month.

According to the data released by the Centre for Monitoring Indian Economy (CMIE) — which conducts its own survey — India did not do very well on the employment front in August.

The unemployment rate shot up to 8.3 per cent, which was the highest, compared with the rates in the past 12 months.

“This rise in the unemployment rate reflects the inability of the economy to provide adequate jobs at a time when the demand for jobs from people increased,” CMIE said in a statement.

The CMIE data showed salaried jobs fell 4.6 million to 76.2 million in August — the lowest level of salaried jobs seen in 15 months.

Of the new EPF subscribers added in August, 575,570 subscribers are in the 18-25 age group, down 10.5 per cent from the 643,038 subscribers in July. This is crucial as subscribers in the 18-25 age group are seen as first-timers in the labour market, reflecting the robustness of the job market.  

However, net payroll additions, which is calculated taking into account new additions, number of exits, and return of old subscribers, was pegged at 1,694,211 in August, up 2.5 per cent from 1,652,818 in July.

The number of subscribers that exited the EPF scheme in August declined sharply to 371,101, from 738,438 in July. Of the 1,694,211 net subscribers in the month of August, while 1,331,053 subscribers are male, only 363,199 net subscribers are female. 

The net monthly payroll numbers are provisional in nature and often revised sharply the following month. That is why the new EPF subscriber figure is accepted with more trust than net additions.

The monthly data release is part of the government’s effort to track formal sector employment in the country by using payrolls.   

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, and the National Pension System.