Data from EPFO and ESIC show a recovery in job creation in the formal sector; Check details
Job creation in the formal sector accelerated from April to June 2022 on the back of the economic recovery, according to official payroll data. New EPFO (Employee’s Provident Fund Organization) subscribers jumped about 40% year-on-year in the June 2022 quarter and almost 30% in June.
New Employees State Insurance Corporation (ESIC) subscribers in the first quarter of 2022-23 increased by 45% and 48% in June, indicating a recovery in job creation. The ESIC applies to non-seasonal manufacturing establishments employing 10 or more workers with a salary cap of Rs 21,000 per month.
The ESI scheme for India is an integrated social security scheme designed to provide socio-economic protection to workers in the organized sector and their dependents, in contingencies such as sickness, maternity and death or invalidity due to an accident at work or an occupational hazard. The salary cap is Rs.21000/- per month. Subscribers are referred to as insured persons (IP) and a new IP number may also arise due to a change in employment. Employees can stop contributing due to salary exceeding the legal ceiling of Rs 21,000 per month or due to resignation, death, retirement or dismissal. The number of members of this system also gives an idea of the level of employment in the formal sector.
India’s GDP grew by 4.1% in the fourth quarter of FY 2021-22. For the full fiscal year 2021-22, GDP grew by 8.7%. Economic growth had seen a contraction of 6.6% in the previous fiscal year 2020-21. Gross domestic product (GDP) increased by 2.5% during the corresponding period from January to March of 2020-21. The economy had grown by 5.4% in the December 2021 quarter.
“Real GDP or Gross Domestic Product (GDP) at constant prices (2011-2012) during the year 2021-22 is expected to reach a level of Rs 147.36 lakh crore, compared to the first revised estimate of Rs 135 .58 lakh crore for the year. 2020-21, published on 31.01.2022. GDP growth in 2021-22 is estimated at 8.7% against a contraction of 6.6% in 2020-21,” an official statement had said.
However, the share of national pension system affiliates fell by 0.4% year-on-year in the June 2022 quarter and by 25% in June. The National Pension System (NPS), a government-sponsored pension scheme, was launched in January 2004 for government employees only. It was then opened to all sections in 2009. In December 2011, the government also included employees of companies, including state-owned companies, in the system.
Over the past five years, official data showed that between September 2017 and June 2022, around 5.60 crore new subscribers joined the EPF program.
During the period, the addition of new subscribers under the ESI program was 6.92 crores. During the same period, the NPS (including government and corporate programs) saw a total addition of 36.5 lakh subscribers, according to data from the Ministry of Statistics and Program Implementation.
“This report gives different perspectives on employment levels in the formal sector and does not measure employment at a holistic level,” MoSPI said.
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