EPFO Data Shows New Job Creation Declined In FY20, Says SBI Research
Nearly 60.8 lakh first jobs were created in 2019-20 compared to 89.7 lakh such jobs in 2018-19, SBI Research says.
Job creation slowed in the previous financial year, reflective of a broader economic slowdown at a time when the Covid-19 outbreak and the subsequent national lockdown were yet to shadow business activity.
Nearly 29 lakh fewer new jobs were created in Asia’s third-largest economy in 2019-20 compared to a year ago, SBI Research said in a report citing Employee Provident Fund Organisation data. As many as 89.7 lakh such jobs were created in 2018-19, the report said.
New or first job is the net new payroll after adjusting rejoined EPFO members, and those employers who transition from the informal to the formal sector and come under its ambit.
That comes as the previous fiscal was impacted only by a few days due to the pandemic, which has since badly affected major urban centres, where the pace of infection transmission escalates by the day. It’s also seen pushing India’s economy to a contraction for the first time in nearly four decades.
“The situation is very grave for FY21,” the note authored by SBI Group’s Chief Economic Adviser Soumya Kanti Ghosh said.
Second jobs—or members who exit their EPFO subscription and re-subscribe—increased by 12.7 lakh to 23.3 lakh in FY20 compared to a year ago, indicating shuffling of jobs, the report said.
The payroll data released by the government on Thursday shows net new employee provident fund subscribers during 2019-20 at 94.7 lakh—a drop by nearly 17.8 lakh over the previous year’s numbers. Net new subscribers were calculated by adding new EPF subscribers to those who exited and joined again, and subtracting those members to exited from EPF.
This doesn’t represent the correct picture as data includes number of exited members who have rejoined, and doesn’t reflect fresh job creation, the report said.
Although the EPFO data for April 2020 isn’t comparable with last year, the data shows only 52,797 first jobs were created in April 2020, which was 9% of such jobs created in the same month a year ago.
The data released by the government also showed that the number of new subscribers to the National Pension Scheme has declined by 17,256 year-on-year in 2019-20.