According to the EPFO’s provisional payroll data, the number of jobs added under the Workers’ Provident Fund Organisation (EPFO) decreased month over month by 14.45% to 8,02,250 from 9,37,780 net new subscribers added in November. December is the third month in a row that the number of new participants in the social security programme has stayed below the 1 million threshold.
According to the most recent payroll information made available by the Employee Provident Fund Organisation (EPFO), Amit Gupta, MD of SAG Infotech, the number of new formal jobs created in December decreased sequentially and stayed below the 1 million thresholds for a third consecutive month, signalling pressure in the labour market.
Unemployment rate increased to 8.30% in December
“Data from the Centre for Monitoring Indian Economy (CMIE), which performs its own surveys, showed that India’s employment situation remained difficult in December. Due to a significant increase in urban unemployment, the unemployment rate rose from 8.03% in November to 8.30% in December. Although there were more people entering the workforce, the economy only produced a small number of employment, according to Amit Gupta.
The government utilises the EPFO payroll data as a frequent indicator of job growth in the formal sector of the economy. The age group of 18 to 21 years has the greatest enrollment, with 2.39 lakh members, followed by the age group of 22 to 25 years, with 2.08 lakh members, out of the 8.02 lakh new members in December. The age brackets of 18 to 25 make up 55.64% of all new members this month. This suggests that the bulk of members joining EPFO are unemployed individuals who are joining the nation’s organised sector labour force.
The top five states in terms of net member addition, according to state-level payroll data, are Maharashtra, Tamil Nadu, Gujarat, Karnataka, and Haryana. Together, these states increased the membership by 60.08% in December 2022. Yet, recent information from other sources also revealed a slowing in the formal employment creation process.
In December 2022, EPFO’s net membership increased by 14.93 lakh. Payroll data shows a rise of 32,635 in net membership addition in December 2022 when compared to the same month in the prior year in 2021. Almost 3.84 lakh members left the organisation, while 10.74 lakh members left and rejoined, according to the data. In order to extend their social security protection, these members chose to transfer their accumulations rather than seek for final settlement when they changed occupations and re-joined EPFO-covered establishments.
The payroll data is tentative because the process of updating personnel records requires ongoing data creation. Hence, the historical information is refreshed each month. Payroll information for the period beginning in September 2017 has been made available by EPFO since the month of April 2018. A new process that enables participants and their employers to jointly apply for a greater pension under the Workers’ Pension Plan has been introduced by the retirement fund organisation (EPS).
