Formal job creation slowed in Aug.23, indicating a downward slide in the labour markets. As per the Employees’ Provident Fund (EPF), the number of new monthly subscribers declined by 13.3% in August in comparison to July. In absolute numbers, new monthly subscribers decreased from 1.06 million in July to 9,25, 984 in August, reported Wire.
The latest payroll data released by EPFO on Friday, October 20, also revealed that the share of women also decreased from 26.7% (2,85, 424) in July to 26.3% (2,43,510). However, the share of young subscribers, in the age group of 18-28, shot up marginally from 67.97% (7,26,415) in July to 68.3% (6,32,331) in August, Business Standard reported.
The EPFO payroll data helps to track employment creation in the formal sector, as it is mandatory for every new employee to sign up for provident fund under the EPFO. The National Statistical Office (NSO) also uses EPFO data to analyse employment trends in the country.
On the other hand, the net payroll addition also went up marginally by 0.8% to 1.69 million in August from July 1.68 million. The net payroll is calculated by considering the number of new subscribers, the number of exits, and the return of old subscribers.
It should be noted that net monthly payroll numbers are provisional in nature and are revised sharply the following month. Therefore, the number of new EPF subscribers holds more significance than net additions.
Rituparna Chakraborty of TeamLease Services said the momentum found in the labour market at the beginning of the financial year, which generally prepares a holistic view of their workforce requirement, lost momentum by monsoon time as more people took to work in the agriculture sector, Business Standard reported.
Chakraborty continued to add that with the onset of the festive season, the momentum could be picked up due to expected demand in retail and consumption sectors, resulting in the creation of new formal jobs.
According to the Centre for Monitoring Indian Economy (CMIE), the unemployment in the country in August rose to 8.1% from 7.9% in July coupled with a situation where there had been increased labour force participation and the economy was not able to create jobs proportionately.
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