New payrolls on the rise

The latest data released by EPFO indicates that net new EPF subscribers during Apr-Jun'21 were 28.9 lakh which was quite encouraging given the fact that this period was marred with a devastating second wave of Covid-19

Mumbai: India created 30.74 lakh payroll in Q1FY22, of which 16.3 lakhs were first jobs or new payroll (EPFO & NPS), 11.8 lakh crores were second jobs or existing payroll and 2.6 lakhs were formalized accounts. Cumulatively, total new payroll or first job generation of EPFO and NPS was almost 16.3 lakh in Q1FY22. If the new payrolls increase at this rate then the new payroll may cross 50 lakh mark, says a study by SBI economists.

The good thing is that three indicators of net EPF subscribers have witnessed a jump in Q1FY22 indicating that labor market disruptions were much lower during 2nd wave. The rate of formalization is now at 10 per cent, while the ratio of first jobs or new payrolls to total payroll was at 50 per cent, indicating every one out of two jobs was a new addition to payroll. This is also an improvement from 47 per cent in FY21.

"We expect labour market activity to remain better in current fiscal as companies will continue with their hiring plans to get ahead of the pandemic," said Soumya Kanti Ghosh, chief economist, SBI group. The latest data released by EPFO indicates that net new EPF subscribers during Apr-Jun'21 were 28.9 lakh which was quite encouraging given the fact that this period was marred with a devastating second wave of Covid-19, he added.

The net new EPFO subscribers or total payroll is the sum total of new payroll or first job, formalization (based on ECR data) and existing payroll or second job. As per our calculation, the total payroll was 28.9 lakhs for Q1FY22, of which 14.5 lakhs were first job or new payroll. The second job (or the exited members who re-joined and re-subscribed) was also encouraging and stood at 11.8 lakh in Apr-Jun'21 (in FY21 the second job was 41.2 lakh). The formalization was 2.6 million in Q1FY22.

NPS data indicates that there was an addition of 1.85 lakh new subscribers in Apr-Jun'21, of which State Govt. payrolls added 1.27 lakh, followed by Non-Govt of 37,587 and 20,353 in Central.