The formal employment in India grew by a robust 28.6% in 2019-20 on the back of major policy reforms of the government, including the roll-out of GST, allowing fixed-term contracts across sectors and lower exits by EPFO subscribers because of better returns on PF deposits and services offered by the retirement fund body.
The top sectors which have seen over 50% increase in formalisation of workforce are hospitality and financial institutions while sectors like textiles have seen a jump of 20% as per the payroll data of the Employees’ Provident Fund Organisation, shows the payroll data of EPFO.
The data of EPFO shows that net additions to EPFO stood at 78.58 lakh in 2019-20 compared to 61.12 lakh added in 2018-19, a jump of over 28%, though the numbers have been on the rise since the collation of the data from September 2017, which also coincides with the roll-out of GST in the country since July 2017.
According to EPFO, the number of persons who have exited and then re-joined membership has greatly increased during the period. “This points to the fact that not only enrolment has grown, but member retention has also improved a lot,” Sunil Barthwal, central provident fund commissioner of EPFO said. “It also indicates that more workers are retained in the formal sector and less workers are moving from formal to informal sector,” he added.
Source: Economic Times