The number of monthly fresh formal hirings saw a slowdown in August, signalling a downturn in the formal labour market.
In August, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) decreased by nearly 11 per cent to 930,000.
This is a four-month low from 1.05 million in July, according to the latest monthly payroll data released by the Employees’ Provident Fund Organisation (EPFO) on Sunday.
The EPFO data is considered crucial as only the formal workforce enjoys social security benefits and is protected by labour laws.
Of the total 930,000 new EPF subscribers in August, the share in the 18-25 age group also declined slightly to 59.26 per cent (551,100) from 59.4 per cent (625,000) in July.
This is crucial because subscribers in this age group are usually first-timers in the labour market, thus reflecting its robustness.
Additionally, the proportion of women among new subscribers also declined to 27.2 per cent (253,000) from 29 per cent (305,000) during the preceding month.
This highlights deterioration in female participation in the workforce.
Meanwhile, the net payroll additions — calculated by taking into account the number of new subscribers, the number of subscribers that exited, and the return of old subscribers to the social security organisation — stood at 1.85 million in August.
The net monthly payroll numbers are, however, provisional in nature and are often revised sharply the following month.
That is why the new EPF subscriber figure is considered more reliable than net additions.
“The above payroll data is provisional since the data generation is a continuous exercise, as updating employee records is a continuous process.
“The previous data gets updated every month,” said the labour ministry, in a statement.
The payroll data also highlights that approximately 135,400 members exited and subsequently rejoined EPFO.
These are members who switched their jobs and re-joined the establishments covered under the ambit of EPFO.
They opted to transfer their accumulations instead of applying for final settlement. Hence, they safeguarded long-term financial well-being and extended their social security protection.
An industry-wise break up of net payroll numbers shows that nearly two of every five net additions came from expert services, including manpower suppliers, contractors and security services, among others.
Similarly, a state-wise break up showed that Maharastra (20.6 per cent) reported the highest number of net new additions during August.
“The states/UTs of Maharashtra, Karnataka, Tamil Nadu, Haryana, Delhi, Gujarat, Telangana and Uttar Pradesh individually added more than 50 per cent of the total net members during the month,” the statement said.
