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LATEST NEWS UPDATES | The Numbers Hide The Story -Lola Nayar

The Numbers Hide The Story -Lola Nayar

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published Published on Jul 27, 2018   modified Modified on Jul 27, 2018
-Outlook

Social security enrolment of workers is not a good measure of how many new jobs are created

Employment data has always been a subject of debate in India, more so now that the surge in social security enrolments is ­being cited as evidence to press home that 41.26 lakh new jobs were created between September 2017 and April this year. The Central Statistics Office data earlier this month raises more questions than it ans­wers. Labour ministry sources too are wary of giving any straight ans­wer on the doubts raised.

“We can’t distinguish between formalisation and new jobs,” says a senior off­icial, referring to the surge in the number of employees who have come under social security schemes such as Employees Provident Fund (EPF) and Employees’ Pension Scheme (EPS). The surge in enrolment is mostly due to the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), under which the government pays the employer’s share of contribution in the social security schemes for three years. Covering new employees earning up to Rs 15,000 per month, the government has to pay 3.67 per cent as EPS and 8.33 per cent as EPF contributions during that period. As a result, 54 lakh employees have been enrolled in the two schemes in less than two years, and the government has contributed Rs 1,200 crore to meet the employers’ commitment.

Employment data has always been a subject of debate in India, more so now that the surge in social security enrolments is ­being cited as evidence to press home that 41.26 lakh new jobs were created between September 2017 and April this year. The Central Statistics Office data earlier this month raises more questions than it ans­wers. Labour ministry sources too are wary of giving any straight ans­wer on the doubts raised.

“We can’t distinguish between formalisation and new jobs,” says a senior off­icial, referring to the surge in the number of employees who have come under social security schemes such as Employees Provident Fund (EPF) and Employees’ Pension Scheme (EPS). The surge in enrolment is mostly due to the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), under which the government pays the employer’s share of contribution in the social security schemes for three years. Covering new employees earning up to Rs 15,000 per month, the government has to pay 3.67 per cent as EPS and 8.33 per cent as EPF contributions during that period. As a result, 54 lakh employees have been enrolled in the two schemes in less than two years, and the government has contributed Rs 1,200 crore to meet the employers’ commitment.

As against the government target of five lakh enrolments per year, labour ministry officials point out the enrolments have far surpassed the targets as companies strive to push for formalising employment during the three-year inc­entive period. “Unfortunately, everybody is going by provident fund data, which was never considered imp­ortant in the past for tracking employment,” says Bharatiya Mazdoor Sangh (BMS) secretary-general Vrijesh Upadhyay, who is also a member of the EPFO’s central board of trustees. “Fluctuation in EPF data is nothing new. The emp­loyment market has become very volatile. What many people fail to take into account when basing emp­loyment data on EPF is that a large number of jobs are seasonal or dem­and-driven. An emp­loyee may opt to withdraw the PF while on the look-out for the next job.” In many cases, in fact, the enrolled employee may well have been working on a contract basis with the same company, but without any social security.

Pro-labour reforms have been long pending with policymakers mostly unw­illing to take on the might of corporate lobbies. In the pre-GST era, an estimated 2.5 lakh companies were suspected to be operating without registration. “If each of these companies were employing an estimated 10 workers each, then 25 lakh employees were outside the social security and welfare schemes for workers,” says Upadhyay. “Formalisation in the employment of these 25 lakh people could have spiked up the EPFO enrolment.”

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Outlook, 30 July, 2018, https://www.outlookindia.com/magazine/story/the-numbers-hide-the-story/300399


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