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NEW DELHI : Labor demand remained resilient in July, with Labor Department data suggesting net job creation in the formal sector hit a four-month high of 1.82 million, up 24.5% from a year earlier.
According to preliminary salary data from the Employees’ Provident Fund Organization (EPFO) pension fund, about 1.06 million new members joined EPFO’s social security system for the first time in July.
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Data on new members joining the EPFO has shown a growing trend since April, the Labor Department said in a statement.
Of the total new members, around 58% are in the 18-25 age group, indicating that first-time jobseekers are joining the organized workforce in large numbers and that new jobs in the organized sector are mainly going to young people in the country.
Provident fund data represents individuals entering formal employment as EPFO subscription is mandatory for organizations with more than 20 employees and employees with incomes less than €15,000 per month.
Although the EPFO data gives an idea of the employment scenario in the formal sector, economists and statisticians say they do not provide a complete picture.
According to former chief statistician of India Pronab Sen, the data only shows growth in the organized sector.
“We already know that the formal sector is growing. The problem lies in the informal sector, which is hit by massive unemployment,” said Sen.
“The organized sector has grown at the expense of the unorganized sector and the EPFO is all about organized sector employment. The more appropriate way of measuring jobs should be from the employers’ side to see whether the new jobs are from existing or newly registered employers,” he added.
But others said the EPFO data shows the direction of job creation in a growing economy. “An analysis of the latest EPFO data indicates a clear acceleration in labor market formalization, driven by both new formal jobs and the formalization of existing jobs, and we can also say that economic activity has picked up pace,” said NR Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think tank.
According to EPFO data, around 407,000 members left the area of the PF in July, and 1.17 million members left and rejoined the EPFO.
These members have chosen to retain their membership by transferring funds rather than opting for outright settlement. This can be attributed to various e-initiatives by the EPFO for seamless and uninterrupted service delivery.
A gender analysis of payroll data shows that net female member enrollment was 406,000 in July. A year-on-year comparison of enrollment data shows that women’s new membership in the organized workforce increased 35% in July from a year earlier.
Among the total new members who joined EPFO during the month, female workforce enrollment is recorded at 27.5%, the highest in the last 12 months. This indicates that women’s participation in the organized workforce is increasing in relation to new members joining the EPFO.
State wages and salaries figures show a month-on-month growing trend in net additions in the states of Tamil Nadu, Delhi, Telangana, Andhra Pradesh and Madhya Pradesh.
Maharashtra, Karnataka, Tamil Nadu, Haryana, Gujarat and Delhi added about 1.25 million net members during the month, accounting for 68% of the total net payroll across all age groups.
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