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New EPFO accounts no proxy for new jobs -Santosh Mehrotra and Kingshuk Sarkar

-FinancialExpress.com

Recent registrations cited as proof of job creation were mostly formalisation of existing jobs

Defending the Centre’s record on employment, prime minister Narendra Modi, in a speech in Rajya Sabha, talked about the impressive net enrolment to Employment Provident Fund Organization (EPFO): during 2021, 1.20 crore beneficiaries were enrolled under EPF—about 65 lakh beneficiaries in the 18-25 age bracket, implying they are first-time entrants to the labour market. He connected the net addition to the turnaround in manufacturing, particularly via MSMEs.

Many have used EPFO registration as a proxy for employment generation, even though unemployment had reached its highest rate during the tenure of the present regime, with falling employment rate (share of working age population with work), in the 45 years to 2019. Both rates have worsened since then. Manufacturing employment fell in the last 4 years from 51 to 27 million, halving despite ‘Make in India’.

Net EPFO enrolment does not signify generation of new employment. In most cases, these are contract workers who got registered under EPFO. This can, at best, be termed as formalisation within the organised sector. Contract and casual labour comprise relatively younger workers. These are surplus workers from the primary sector who end up as contract labour in urban and semi-urban areas.

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