New job creation touched a 5-month low in October

October 2021 witnessed the lowest rate in five months of new people joining the formal workforce in India.

Only 7.6 lakh people joined formal work for the first time in October 2021, in comparison to 9.5 lakh people in September according to the payroll data released by the Employees Provident Fund Organisation (EPFO) on Monday. The figures point to a sluggish job market and a slowing pace of new job creation in the formal sector.

12.7 lakh net payroll additions were reported in October, in comparison to 14 lakh net additions clocked in September. The Oct’21 figures demonstrate a year-on-year growth of 10.2% over Oct’20. The net payroll additions factor new subscribers, ones who exited EPFO, and ones who exited but rejoined EPFO by opting to continue their membership with EPFO by transferring their PF accumulations from previous to present PF account instead of opting for final withdrawal. In Oct’21, 5.2 lakh subscribers fell in the latter bracket.

The age group of 22-25 years has registered the highest number of net enrolments with 3.4 lakh additions during Oct’21 while 2.5 lakh net enrolments came from the 18-21 years age group. The age groups of 18-25 years have contributed around 46.1% of total net subscriber additions in Oct’21. “Members of 18-25 years age groups are usually fresh hands in the job market and signify a crucial stage for an individual’s potential in terms of earning capacity,” the ministry said in its statement.

The highest number of formal jobs were created in the five states of Maharashtra, Haryana, Gujarat, Tamil Nadu, and Karnataka which together added 60.6% of the total net payroll addition in Oct’21.

Industries classified under the ‘expert services’ category (consisting of manpower agencies, private security agencies, and small contractors, etc.) constituted 40.7% of total subscriber addition in Oct’21.

Of the 12.7 lakh net enrolments in Oct'21, only 21.1% were females, in comparison to 24.1% in Apr'21. The share of females in net enrolments has been sliding year on year - from 21.1% in 2018-19 to 18.1% in 2020-21.

Reference Reading

EPFO is the country’s principal organization responsible for providing social security benefits to the organized/semi-organized sector workforce covered under the statute of EPF & MP Act, 1952. It provides provident fund, pension benefits to the members on their retirement, and family pension and insurance benefits to their families in case of the untimely death of the member.

The payroll data is provisional since the data generation is a continuous exercise, as updating employee records is a continuous process. The previous data hence gets updated every month.