Job creation in June hits record high

By: Umesh Chandra

According to the recent data released by the Ministry of Statistics and Programme Implementation (MOSPI), the month of June witnessed the highest number of new subscribers under the Employees’ Provident Funds Scheme (EPFO) and Employees’ State Insurance Scheme (ESIC) in financial year (FY) 2023.

According to the recent data released by the Ministry of Statistics and Programme Implementation (MOSPI), the month of June witnessed the highest number of new subscribers under the Employees’ Provident Funds Scheme (EPFO) and Employees’ State Insurance Scheme (ESIC) in financial year (FY) 2023. Data showed that net new subscriber additions under EPFO and ESIC have increased by 24.4 percent and 2.67 percent respectively in June as compared to the month of May. This indicates the growing employment prospects, at least in the formal sector, as economic activities pick up.

In 2021, the government had pledged to credit (subject to restrictions) the shares of both employees and employers (12 percent of each wage) to the provident fund (PF) contribution for a period of two years. This was done in order to increase job creation in the formal sector in the wake of the COVID-19 outbreak. Additionally, businesses that hired new staff on or after October 2020 and through March 2022, or that rehired employees who lost their employment between March 2020 and September 2020, were eligible to use the programme.

The Employees' State Insurance Scheme is an integrated measure of social insurance embodied in the Employees' State Insurance Act and it is designed to protect "employees" as defined in the Employees' State Insurance Act, 1948, against the impact of incidences of sickness, maternity, disablement, and death due to employment injury and to provide medical care to insured persons and their families. The ESI Scheme applies to factories and other establishments, viz., road transport, hotels, restaurants, cinemas, newspapers, shops, and educational or medical institutions, where 10 or more people are employed. However, in some states, the threshold limit for coverage of establishments is still 20.

The accompanying chart shows the number of new subscribers that have joined the EPFO and ESIC schemes in FY 2023. Out of the first three months of the fiscal year, June's net new EPFO subscribers were the highest at 1.83 million. In May and April, it was 1.47 million and 1.42 million, respectively. 
Just like EPFO, ESIC subscribers have also increased. June's net new subscribers were the highest in FY 2023 at 1.54 million. In May and April, it was 1.5 million and 1.28 million, respectively. However, net new subscriber additions to the National Pension Scheme (NPS) fell 4.1 percent in June to 58,425 from 60,926 in May. In April it was 64,569.

In the country, it is noticeable that jobs are returning, and at the same time, the unemployment rate has marginally decreased. According to the Centre for Monitoring of Indian Economy, India’s overall unemployment rate in June 2022 was 7.8 percent, up from 7.12 percent in May 2022, but slightly low from 7.83 percent in April 2022.

Some economists and experts have stated that the urban labour market is showing a sense of stability. Economy indicators have indicated a growth in industrial production. Constant intervention by RBI has also help in arresting the growing food prices.