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India Added 5.2 Crore New Formal Jobs in FY20-23

The economy has added around 5.2 crore new formal jobs between FY20 and FY23, with the net addition being 2.7 crore, according to a report based on an analysis of the EPFO, NPS and ESIC data.

The government has since April 2018 releasing monthly payroll data from the Employees Provident Fund Organisation or EPFO, the National Pension Scheme or NPS and the Employees State Insurance Corporation or the ESIC, based on the recommendations given by Ghosh & Ghosh report.

The EPFO payroll data trends for the past four years show that net new EPF subscriber addition during FY20-23 was 4.86 crore, which consists of new payroll (first payroll), second payroll (rejoined/resubscribed members) and formalised payrolls.

Accordingly, the net new payroll (first job/fresh job) adjusted for re-joined/re-subscribed members and formalisation (based on ECR data), shows that the actual net new payroll was 2.27 crore during FY20-23, SBI Research said in a report Tuesday.

Of this, the first jobs were 47 per cent of the total net new payroll addition and the second jobs (the exited members who re-joined and re-subscribed) stood at 2.17 crore during these four years. This means that the net increase in formalisation was at 42 lakh in these years, said the report penned by group chief economic advisor to the SBI Soumyakanti Ghosh.

If the Q1 EPFO payroll data of FY24 looked at the trend, it is encouraging as 44 lakh net new EPF subscribers joined, of which the first payroll was 19.2 lakh. If the trend continues for the rest of FY24, then the net new payroll will cross the 160 lakh mark, which will be the highest ever with the first payroll in the range of 70-80 lakh.

NPS data indicate that 8.24 lakh new subscribers in FY23, of which state government payrolls stood at 4.64 lakh, followed by non-government jobs of 2.30 lakh and 1.29 in the central government.

During the past four years, around 31 lakh new subscribers joined the NPS. That means, cumulatively, total payroll generation of the EPFO and NPS was more than 5.2 crore during FY20-23, Ghosh said.

The report also notes a significant decline in revision of the number of members who have rejoined or resubscribed in the first quarter of the current financial year. This would mean more people may be deciding to stick to their current employment.

Additionally, the share of women’s payroll was around 27 per cent.