The Employees’ Provident Fund Organisation (EPFO) has revised down the net enrolment numbers for September-April by 3.95 lakh or 9.6 per cent to 37.31 lakh from its earlier estimate of 41.26 lakh released last month.
For May, the enrolment numbers were at the highest level since September at 7.43 lakh, taking the cumulative net enrolment for September-May to 44.75 lakh, the data released by EPFO on Friday showed.
In the latest release, the fourth in the series, the EPFO has reduced the net payroll enrolment numbers for each of the eight months since September, that is, September-April. While for April, the net payroll enrolment number has been revised down slightly by 1.4 per cent to 6.76 lakh from 6.85 lakh, for March, it has been cut sharply by 23.4 per cent to 3.68 lakh from 4.80 lakh earlier. The May release had estimated the enrolment numbers for March at 6.13 lakh in the first instance.
The Indian Express had reported on July 6 about the sharp downward revision in the EPFO net enrolment numbers, which were the basis for an ‘independent’ study released earlier this year that the government had cited as an indicator of buoyancy in formal job creation in the economy. In the previous release dated June 25, the government had cut the enrolment numbers for September-March by 4.95 lakh or 12.5 per cent to 34.4 lakh.
Soumya Kanti Ghosh, group chief economic advisor, State Bank of India and co-author of the study on payroll reporting, in a note said: “New payroll (excluding formalisation) during September-May is, however, 36.6 lakh (44.7 lakh excluding estimated 8.1 lakh formalisation).”
For the downward revision, he said: “The EPFO is releasing enrolment numbers on a net basis, so it might be the case that companies are reporting leaving of employees with a lag, while the joining of employees is being reported immediately. Additionally, given that retirees are also netted out, this may imply a downward bias to net EPFO numbers as retirees mean a new vacancy and hence a new hire.”
As per the Friday release, the revision in enrolment numbers for September-April in percentage terms ranges from 1.4 per cent to 23.4 per cent. The EPFO enrolment numbers along with data of Employees’ State Insurance (ESI) Scheme, National Pension System (NPS), General Provident Fund (GPF) were the basis for a study titled, Towards a Payroll Reporting in India by Soumya Kanti Ghosh and Pulok Ghosh in January this year, which had estimated that around 70 lakh jobs might be created in 2017-18.
On the basis of EPFO data, the study had estimated that 36.8 lakh new subscribers in the age band 18-25 years had enrolled during April-November 2017 and extrapolating it for the full year, they had estimated that 55.2 lakh new subscribers would be enrolled in 2017-18. In his Budget speech for 2018-19, then Finance Minister Arun Jaitley had cited the study saying, “An independent study conducted recently has shown that 70 lakh formal jobs will be created this year.”