The formal labour market in January experienced a slowdown as fewer fresh jobs were created during the month, the latest payroll data released by the Employee Provident Fund Organisation (EPFO) on Sunday shows.
In January 2024, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) declined by nearly 4 per cent to 807,865 from 840,584 in December 2023, according to the monthly payroll data.
In January last year, 830,047 subscribers joined the EPF. This data is crucial as only the formal workforce enjoys social security benefits and is protected by labour laws.
Of the total 807,865 new EPF subscribers in January, the share of young people belonging to the 18-28 age group also decreased slightly to 66.4 per cent (536,442) in January from 67.17 per cent (564,630) in the previous month. This is crucial because subscribers in this age group are usually first-timers in the labour market, thus reflecting its robustness.
Meanwhile, the share of women among the total new subscribers increased slightly to 25.32 per cent (204,569) during the month as compared to 24.8 per cent (208,685) in the previous month.
On the other hand, 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 2.5 per cent to 1.6 million in January from 1.56 million in December last year.
The net monthly payroll numbers are, however, provisional and they are often revised sharply the following month. That is why the new EPF subscriber figure has greater reliability than net additions.
“The payroll data highlights that approximately 1.2 million members exited and subsequently rejoined EPFO. These members switched their jobs and re-joined 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,” the labour ministry said.
According to the Centre for Monitoring Indian Economy (CMIE), which conducts its own Consumer Pyramids Household Survey (CPHS), the labour markets fared slightly better in January as the unemployment rate fell during the month to 6.8 per cent from 8.7 per cent in the previous month on the back of decline in the number of people looking for work. During January, the labour force participation rate (LFPR) inched down from 41.9 per cent to 40.6 per cent.
The monthly EPF subscription data released by the labour ministry is part of the government’s efforts to track the formal job creation in the country by using payrolls as a measure.
First Published: Mar 24 2024 | 10:17 PM IST