Formal job creation picks up in November

New Delhi: Formal job creation saw a recovery in November after touching several months’ low in October. However, it was the second lowest in the current fiscal year, according to official payroll data released by the ministry of statistics and programme implementation (MoSPI) on Wednesday.

New subscribers of the Employees’ Provident Fund Organization stood at 8.99 lakh in November, 1.71 lakh higher than in October, indicating a slight pick-up in creation of new jobs.

Net subscribers during the month stood at 16.25 lakh, which includes new EPF subscribers and those who rejoined and minus the members that stopped subscribing indicating that they left formal jobs. It is higher than 11.13 net subscribers in the previous month.

Employees rejoining the formal workforce rose to 11.2 lakh in November from 10.16 lakh in October. Incidentally, only 3.2 lakh members ceased EPF subscriptions during the month, compared to 6.71 lakh in October, and 8.8 lakh in September, suggesting that fewer people left the workforce pointing to stability in employment.

Employee Provident Fund is applicable to establishments having more than 20 workers with a pay ceiling of 15,000 per month. The number of members subscribing to this scheme gives an idea of the level of employment in the formal sector.

The pick-up in employment can also be attributed to recovery in contact-intensive services like travel, tourism, etc after two years of Covid-19. PMI services in the third quarter averaged 56.6 points compared to 55.6 in the previous quarter.

“The present report gives different perspectives on the levels of employment in the formal sector and does not measure employment at a holistic level,» said the ministry in the report. “The numbers of subscribers are from various sources and there are elements of overlap. Therefore, the estimates from various sources are not additive,» it added.

The Indian economy saw growth slow to 6.3% in the second quarter after growing by double digits in the first quarter due to dismal performance of the manufacturing sector.

The new subscribers under the Employees’ State Insurance Corporation grew to 14.27 lakh in November from 11.93 lakh in October, also indicating an uptick in employment. ESIC is applicable to non-seasonal manufacturing establishments employing 10 or more workers with a wage ceiling of 21000 per month. It is essentially a social security scheme tailored to provide socio-economic protection to the workers in the organized sector and their dependents in contingencies. The number of subscribers of this scheme also gives an idea of the level of employment in the formal sector.

The percentage of subscribers under the National Pension Scheme fell to 60,571 in November, from 60,682 in October. National Pension Scheme (NPS) is applicable to any citizen of India, whether resident or non-resident, individuals who are aged between 18 and 60 years.

The MoSPI report is based on the payroll data of new subscribers of various social security schemes run by ESIC, the EPFO and PFRDA. It has been releasing such data on these bodies since April 2018, covering the period starting from September 2017. The numbers of subscribers are from various sources and there are elements of overlap.

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