On the rise: EPFO monthly payroll count jumps 43% in just a month
The highest percentage rise was in the age brackets above 26 years of age. Additions in younger age brackets are associated with new jobs, while those in older ones with a change of jobs or formalisation of companies, experts said.
While they are divided over the possible reasons behind a sudden surge in April, the EPFO says the data is raw and though it is indicative of jobs to some extent, it does not give a clear explanation on the creation of livelihoods.
“We started publishing raw data for the purpose of transparency on jobs in the organised sector but it is very difficult to interpret correctly and derive conclusions out of it,” says V P Joy, central PF commissioner.
Soumya Kanti Ghosh, a chief economist at State Bank of India, thought the rise could be due to new recruitments at the turn of the financial year (April being the first month of 2018-19). “Some industries are picking up, the construction sector is a good example. It is possible that companies are doing fresh investment and recruitment in the new financial year,” he said.
Ghosh, along with IIM Ahmedabad economist Pulak Ghosh, had authored a first-of-its-kind study on EPFO payroll data in January, commissioned by NITI Aayog.
For employees nearing or having crossed the age of 30 years, the payroll count almost doubled in April from March. The absolute number of payroll additions was highest in the 18-25 years bracket but the gap between age-groups had narrowed in April.
This is the reason many economists are interpreting this more as formalisation and less as new job creation. “April is not normally a month of recruitment. So, it can hardly be said that the surge is due to new jobs. Instead, it suggests more enrolments to EPFO, in the process of gradual formalisation of firms post implementation of the goods and services tax,” felt Madan Sabnavis, a chief economist at CARE Ratings.