As per payroll data released by the Employees’ Provident Fund Organisation (EPFO) and the National Pension System (NPS) for the first time, the economy added at least 2.2 mn formal jobs over the six months from September last year to February this year.
The EPFO data shows reveal 3.1 mn new additions across age groups over this period. Out of this number, those in the 18-25 age group, which are considered a proxy for new jobs, amount to 1.85 mn. Meanwhile, excluding the 18-25 age bracket, additions in the higher age groups hint towards greater formalization of the economy as per experts.
Coming to NPS, the new accounts opened in the central and government sector stood at 350,000 during the six month period, thus taking the total to 2.2 mn.
Soumya Kanti Ghosh, chief economist at SBI stated, “The data shows there was a good increase in jobs every month in the last six months, which will now help fill the missing link for policy-making.”
While the data bolsters the government’s claims on job creation, an issue it has been facing criticism on, but experts also point out that counting new additions to provident fund subscribers may not provide an accurate picture. Critics also say that new data overestimates job creation in the organized sector as many workers, who were working on a contract with same companies, were added to the fund.
It is to be noted that India’s organized sector payroll data is collated using information from firms registered under EPFO and ESIC. However, only companies with 20 and more employees are registered under the Employees’ Provident Funds and Miscellaneous Provisions (EPF & MP) Act, while the ESIC Act covers those with a minimum of 10 employees.