Economic Survey: Significant acceleration in formalisation of the job mkt

An analysis of the latest EPFO data suggests a significant acceleration in formalisation of the job market, driven by both new formal jobs and formalisation of existing jobs

An analysis of the latest Employees' Provident Fund Organisation (EPFO) data suggests a significant acceleration in formalisation of the job market, driven by both new formal jobs and formalisation of existing jobs, during 2021, with 13.95 lakh net addition to EPF subscribers in November 2021.

"Broadly, the EPFO data covers the low paid workers in medium and large establishments of the formal sector. The net addition in EPFO subscriptions is an indicator of the extent of formalisation of the job market, and the coverage of social security benefits to the organized/ semi-organized sector workforce. An analysis of the latest EPFO data suggests significant acceleration in formalisation of the job market, driven by both new formal jobs and formalisation of existing jobs, during 2021, with 13.95 lakh net addition to EPF subscribers in November 2021," the Economic Survey tabled in the parliament on Monday stated.

"Owing to the large impact witnessed during the nation-wide lockdown, the net addition to EPFO subscriptions declined and turned negative in April-May 2020, which implies a net exit was registered from the scheme. With the unlocking of the economy and easing of restrictions, the EPFO subscriptions bounced back swiftly, reaching 12.2 lakh in September 2020," it said.

The net additional subscription witnessed a decline again in November 2020 and also during the second wave of Covid-19 (April-June 2021). However, the magnitude of decline in both the cases was less compared to that during April-May 2020. The monthly net additional EPF subscription during May 2021 was 5 lakh as against minus 2.9 lakh in May 2020.

The latest payroll data of EPFO shows that the net addition in EPF subscribers reached 13.95 lakh during the month of November, the survey said.

"In November 2021, net addition in subscription peaked with 13.9 lakh new subscribers, the highest in any given month since 2017. The latest payroll data of EPFO shows that the net addition in EPF subscribers reached 13.95 lakh during the month of November 2021, which translates into growth of 109.21 per cent from November 2020, and a growth of 25.65 per cent from October, 2021," the survey said.

The report mentioned that the points to the formalisation of the job markets as well as new hirings.

"Thus, the monthly net addition in subscriptions during 2021 has not only been higher than the corresponding monthly values in 2020, but they have also surpassed the levels of the corresponding months during pre-pandemic year 2019. This points to the formalisation of the job markets as well as new hirings," it stated.

Finance Minister Nirmala Sitharaman on Monday tabled the Economic Survey 2021-22 along with Statistical Appendix in the Lok Sabha on the first day of the Budget session of Parliament.