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The new payroll data, prepared by the Employees Provident Fund Organisation (EPFO), show that nearly 10 lakh jobs were created in the formal sector in July. This is the highest accretion in any month since September last year, for which the first monthly payroll data is available.
The new data was placed on the EPFO’s website on Thursday.
The data also showed a revision in the monthly numbers. The number for September 2017 has been revised downwards, while for all other months it has seen an upward revision. The total fresh payroll numbers for September 2017-June 2018 have gone up to 52.30 lakh as against 47.14 lakh, according to the estimate released in August.
According to the EPFO, the data is provisional as the updation of employees’ records is a continuous process and gets updated in subsequent month/s, which is why both monthly and total number have been revised.
The net payroll data also explains which sector and which State has created more fresh jobs and provides age-wise figures. For example, in the age bracket of 22-25, the top 10 sectors include Export Services, Electric, Mechanical or General Engineering Products, Trading, Engineer Contractors, Building & Construction Industry, Manufacturing, Textiles, Hospitals, Heavy-Fine Chemicals and Cleaning Business. In the similar age bracket, Maharashtra was the first among the States followed by Karnataka, Tamil Nadu, Gujarat, Haryana and Delhi besides other States and Union Territories.
The net payroll data is arrived at after subtracting the number of members exited from number of new EPF subscribers and then adding the number of exited members who rejoined and re-subscribed. EPF is managed under the aegis of Employees' Provident Fund Organisation (EPFO).
It covers every establishment in which 20 or more persons are employed and in certain organisations even if they employ less than 20 persons each, subject to certain conditions and exemptions. It is a mandatory savings scheme. The pay limit is ₹15,000 per month. Persons drawing pay above ₹15,000 are exempted or can be enrolled with some permission or on voluntary basis.
The number of members subscribing to this scheme gives an idea of the level of employment in the formal sector.
The importance of payroll data to assess job creation in the formal sector came into limelight after a study advocated the need for monthly payroll reporting in India like in other economies. The study had estimated that around 70 lakh jobs might be generated in 2017-18. It was criticised initially but later, based on enrolment under EPFO, NPS (National Pension Scheme) and ESIC (Employee State Insurance Corporations), the number came out around 67 lakh which was very close to the study. Research has revealed that the payroll data have the most profound impact on all high frequency economic reports and major policy implications.
Data release
Now, the Ministry of Statistics & Programme Implementation (MOSPI) releases employment related statistics in the formal sector using information on the number of subscribers who have availed benefits under EPFO, ESIC and NPS. The first such data was released in April covering the period September 2017 to February 2018.
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