The country’s pioneering payroll count — based on the Employees’ Provident Fund Organisation’s (EPFO) subscription database — released on Wednesday gave government managers and some data analysts their “I told you so” moment. As the EPFO said 3.1 million contributors were added on a net basis during the half-year between September 2017 and February 2018, they claimed that it meant a whopping 6 million new formal jobs — roughly equivalent to the skilled workforce entering the job market annually or 10% of the retirement fund body’s active subscriber base — were created in the whole of 2018-19.
If true, that would have dismantled all criticism of jobless growth that the Narendra Modi government has had to face.
But just a bit of analysis would reveal how facile these optimistic assumptions are. Even though the EPFO wasn’t putting out month-wise payroll data earlier, it used to publish the average number of subscribers (who contributed) annually.
And the average subscriber base has seen accelerating growth over the last four to five years, from 6% in FY15, the first year of this government, to over 15% in FY18.
So was that not a sign of a boost to job creation? Hardly. Job growth has little to do with the recent jump in the EPFO subscriber base.
An amnesty scheme for EPF defaulter firms that ran between January and July 2018 saw these firms enrolling some 4.9 million people in FY17and the bulk of these were obviously old workers rather than new recruits. Including the amnesty additions, the EPFO contributor base rose 9.5% to 41.2 million in FY17, but the base would have shrunk to 36.2 million in the year — even lower than previous year’s base of 37.6 million — had the amnesty not been implemented.
Source: Financial Express