 "Fresh formal hiring at seven-month high in April, shows EPFO data")
The number of fresh formal jobs generated in a month increased to a seven-month high in April, signalling a recovery in the formal labour market in the country, according to the latest monthly payroll data released by the Employees’ Provident Fund Organisation (EPFO) on Thursday.
In April, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) sequentially increased by 18.77 per cent to 887,438 from 747,146 in March.
Previously, in September 2023, 950,527 fresh formal employees had joined the EPF.
The EPFO data is considered crucial as only the formal workforce enjoys social security benefits and is protected by labour laws.
Of the total 887,438 new EPF subscribers in April, the share of young people belonging to the 18-28 age group declined to 65.5 per cent (581,106) from 66.74 per cent in the preceding month. This is crucial because subscribers in this age group are usually first-timers in the labour market, thus reflecting its robustness.
Additionally, the share of women among the total new subscribers increased to 28.1 per cent (249,254) during the month, compared to 26.8 per cent (199,998) in March.
Meanwhile, the net payroll additions — calculated by taking into account the number of new subscribers, the number of subscribers that exited, and the return of old subscribers to the social security organisation — increased by 31.94 per cent to 1.9 million in April from 1.44 million in March.
However, the net monthly payroll numbers are provisional in nature and are often revised sharply the following month. That is why the new EPF subscriber figure is considered more reliable than net additions.
“The payroll data highlights that approximately 1.45 million members exited and subsequently rejoined EPFO. These members switched their jobs and rejoined the establishments covered under the ambit of EPFO and opted to transfer their accumulations instead of applying for final settlement, thus safeguarding long-term financial well-being and extending their social security protection,” said the labour ministry in a statement.
However, data from the private agency Centre for Monitoring Indian Economy (CMIE), which conducts its own Consumer Pyramids Household Survey, showed that the labour markets worsened in April as the unemployment rate in India increased to 8.1 per cent from 7.4 per cent in March.
“The unemployment rate recorded an uptick in April alongside a fall in the labour participation rate (LPR) as well as the employment rate. LPR in India inched down to 40.9 per cent in April from 41.1 per cent in the previous month,” CMIE said in a statement.
The monthly payroll data released by the 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, sharing data from September 2017 onwards, using information on the number of subscribers under the EPF scheme, the Employees’ State Insurance scheme, and the National Pension System.