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The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation, recently released a report on the employment outlook of the country from September 2017 to February 2023. The report is based on administrative records available with selected government agencies to assess the progress in specific dimensions.
The report focuses on the number of new subscribers under three major schemes - The Employees Provident Fund (EPF), the Employees’ State Insurance Scheme (ESI), and the National Pension Scheme (NPS). The current study provides multiple viewpoints on the state of employment in the formal sector but fails to assess employment holistically. However, it can provide an insight into the Indian job market in the formal sector.
Positive Trend in Employment Growth
The NSO data revealed that 147,982,307 individuals have been enrolled in the formal sector in the last five years, out of which, 6,35,39,726 new subscribers joined the EPF Scheme during the period under consideration, while 8,02,96,298 new subscribers joined the ESI Scheme. Besides this, 41,46,283 new subscribers joined and contributed to the NPS Central Government, State Government, and Corporate Schemes during the same period.
The NSO report shows an overall positive trend in employment growth in the country. Even though the overall numbers are increasing some estimates suggest that the cumulative employment growth rate has declined in the last five years, with the COVID-19 being a major cause of the slowdown.
Employees’ Provident Funds (EPF)
Employees' Provident Funds (EPF) are mandated savings plans established by the Employees' Provident Funds and Miscellaneous Provisions Act of 1952. It is administered by the Employees' Provident Fund Organisation (EPFO). It applies to any institution that employs 20 or more people as well as certain additional enterprises that may be notified by the Central Government even though they employ fewer than 20 people, subject to certain restrictions and exclusions specified in the Act. The monthly salary cap is Rs.15000/-. Persons earning more than Rs. 15,000/- are exempt or can enlist with permission or voluntarily. The number of participants who have signed up for this plan indicates the amount of employment in the formal sector.
Employees’ State Insurance Scheme (ESI)
The Employees' State Insurance Act of 1948 applies to non-seasonal manufacturing companies employing 10 or more people except for a mine pursuant to the Mines Act of 1952 (35 of 1952) or a railway operating shed. The threshold requirement for health and medical establishments is 20 or more employees. The ESI programme in India is an integrated social insurance plan designed to offer socio-economic security to organised sector professionals and their families in eventualities such as sickness, maternity, and death or disability due to an occupational injury or risk on the job.
The monthly salary cap is Rs.21000/-. Subscribers are referred to as Insured Persons (IP), and a new IP number may be assigned as a result of a change in employment. Employees may stop paying contributions if their paychecks surpass the mandatory threshold of Rs.21000/- per month, or if they quit, perish, retire, or are terminated. The number of people who have signed up for this plan also indicates the degree of employment in the formal sector.
Increased Popularity of NPS
The report also highlights the increasing popularity of the National Pension Scheme (NPS). The number of new subscribers under this scheme has been steadily increasing over the past few years. In the period between September 2011 and August 2014, only 10,64,426 new subscribers joined the NPS scheme. However, in the subsequent period between September 2014 and February 2023, the number of new subscribers increased significantly to 41,46,283. This indicates a growing awareness among people about the importance of pension plans for their future financial security.
In conclusion, the NSO report provides valuable insights into the employment growth of the country between September 2017 and February 2023. While the overall trend is positive, there has been a slowdown in employment growth in recent years. The report also highlights the growing popularity of the National Pension Scheme. The information provided in the report can be used by policymakers to identify areas of improvement and implement measures to further strengthen the employment market in the country.