Economic Survey 2023: Share of salaried workers declines, net addition in EPF subscriptions increases

The net addition in EPF subscriptions during FY22 was 58.7 percent higher than in FY21 and 55.7 percent higher than in the pre-pandemic year 2019.

India’s economic growth in FY23, led by private consumption and capital formation, has helped generate employment as seen in the declining urban unemployment rate and the faster net registration in the Employee Provident Fund (EPF), the Economic Survey 2022-23 released on January 31 said.

“Job creation appears to have moved into a higher orbit with the initial surge in exports, a strong release of the ‘pent-up’ demand, and a swift rollout of the capex,” it added.

According to broad status in employment, the share of self-employed people increased and that of regular wage/salaried workers declined in 2020-21 vis-à-vis 2019-20, driven by the trend in both rural and urban areas. The share of casual labour declined slightly, driven by rural areas.

Labour markets have recovered beyond pre-Covid levels, in both urban and rural areas, with unemployment rates falling from 5.8 percent in 2018-19 to 4.2 percent in 2020-21.

As per the Usual Status in the Periodic Labour Force Survey (PLFS), the Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and unemployment rate (UR) in PLFS 2020-21 (July-June) have improved for both males and females in both rural and urban areas compared to PLFS 2019-20 and 2018-19.

As per the Annual Survey of Industries (ASI) FY 2020, employment in the organised manufacturing sector has maintained a steady upward trend over time, with the employment per factory increasing gradually.

The ASI, conducted by the Ministry of Statistics and Programme Implementation (MoSPI), is an important source of industrial statistics of the registered organised manufacturing sector of the economy.

In terms of share of employment (total persons engaged), the food products industry (11.1 percent) remained the largest employer, followed by wearing apparel (7.6 percent), basic metals (7.3 percent), and motor vehicles, trailers, and semi-trailers (6.5 percent).

State-wise, Tamil Nadu had the largest number of persons engaged in factories (26.6 lakh), followed by Gujarat (20.7 lakh), Maharashtra (20.4 lakh), Uttar Pradesh (11.3 lakh), and Karnataka (10.8 lakh).

The Quarterly Employment Survey (QES), conducted by the Labour Bureau, covers establishments with 10 or more workers in nine major sectors viz. manufacturing, construction, trade, transport, education, health, accommodation & restaurants, IT/BPOs, and financial services.

The estimated total employment in the nine selected sectors according to the fourth round of QES (January to March 2022) stood at 3.2 crore, which is nearly 10 lakh higher than the estimated employment from the first round of QES (April-June 2021).

These nine sectors account for around 83 percent of the total employment in establishments with 10 or more workers

The increase in estimates of workers from Q1FY22 to Q4FY22 was driven by rising employment in sectors such as IT/BPO (by 17.6 lakh), health (7.8 lakh), and education (1.7 lakh), due to rising digitisation and resurgence of the services sector economy.

Regarding terms of employment, regular employees constituted the majority of workers across sectors, with a share of 86.4 percent of the total workforce in Q4FY22. Contractual employees formed a relatively small proportion of the workforce in these nine sectors, except Manufacturing (12.4 percent) and Construction (19.0 percent).

The net addition in EPF subscriptions during FY22 was 58.7 percent higher than in FY21 and 55.7 percent higher than in the pre-pandemic year 2019.

In FY23, net average monthly subscribers added under EPFO increased from 8.8 lakh in April-November 2021 to 13.2 lakh in April-November 2022.

The swift rebound of formal sector payroll addition can be attributed to the Aatmanirbhar Bharat Rojgar Yojana (ABRY), launched in October 2020 to boost the economy, increase the employment generation in post Covid-19 recovery phase, and incentivise the creation of new employment along with social security benefits and restoration of employment lost during the pandemic, the survey added.