Formal Employment Sees Significant Growth in FY23 Reveals EPFO Data

India's formal employment sector has witnessed a remarkable surge in job creation during the fiscal year 2023 (FY23), according to recent payroll data released by the Employees' Provident Fund Organisation (EPFO). The statistics reveal a substantial 18.2% increase in formal employment generation compared to the corresponding period in the previous year. The report indicates that over 1.31 crore individuals secured new formal jobs in India during FY23.

While the rise in employment is certainly encouraging, the data also sheds light on the gender disparity within the workforce. Out of the 1.31 crore individuals who acquired formal employment, only a little over 20% were women. The figures indicate that 27.28 lakh women joined the formal workforce, while men constituted a majority with 99.52 lakh new jobs. Despite this gender imbalance, a closer examination of the statistics reveals a positive trend of increased female participation in the workforce.

Between April 2021 and February 2022, 23.5 lakh women entered formal occupations, marking a 15% year-on-year increase in the proportion of women securing new formal jobs. In contrast, the growth rate for men entering the formal workforce during the same period was slightly lower at 13.5%. This signifies a notable improvement in gender parity within the job market.

Examining the data from previous fiscal years further illuminates the evolving dynamics of the workforce. In FY19, approximately 13.05 lakh women entered the formal labour force. The following year, this number surged by 22%. However, due to the adverse impact of the Covid-19 pandemic, the figure experienced a 12.3% decline in FY21. Nonetheless, it rebounded significantly in FY22, with an impressive 87.3% growth rate, surpassing pre-pandemic levels. In FY20, the number of men gaining formal employment rose by 29%, followed by a modest increase of 0.63% in FY21. FY22 witnessed a substantial upswing of 52.35% in male employment figures.

Youngsters Dominate the Job Market

The data also highlights the dominance of young individuals in the job market. Between April 2018 and February 2022, around 53% of the net new EPFO patrons belonged to the age group of 18 to 25. Strikingly, the share of new members over the age of 35 remains dismally low, accounting for only 15% of the total. 

This trend holds true for both genders, with 53% of women and 56% of men aged between 18 and 25 entering the formal workforce. Moreover, the proportion of women above the age of 35 was 16.3%, while among men, it stood at 14%.

The reasons for the increase in employment during FY23 can be attributed to various factors. The government's focus on initiatives like "Make in India," aimed at promoting domestic manufacturing and entrepreneurship, has spurred job creation. 

Additionally, sectors such as technology, e-commerce, and healthcare have experienced significant growth, leading to increased employment opportunities. Government policies and incentives aimed at encouraging formal job creation and economic recovery from the pandemic have also played a crucial role in driving employment growth.

As the job market continues to evolve, efforts should be made to bridge the gender gap and promote inclusivity. Encouraging women's participation and creating avenues for professional growth will not only empower individuals but also contribute to the overall economic development of the nation. Furthermore, addressing the low representation of older workers in the workforce is essential for leveraging their skills and experience.

The significant increase in formal employment generation witnessed in FY23 provides a positive outlook for India's economic recovery and underscores the need to foster an inclusive and diverse job market that benefits individuals from all stratas of society.