Formal employment declines in June; new EPF, ESIC, NPS subscribers fall

Formal employment in June

Formal employment declined in June, as new subscriptions in the government’s three social sector schemes fell from the previous month, data released on August 23 showed.

New subscriptions to the Employees’ Provident Fund (EPF) scheme were down a percent in June from the previous month at 1.02 million. Subscriptions to the Employees’ State Insurance Scheme (ESIC), which caters to relatively low-paid employees, fell much more by 6.5 percent to 1.62 million, a ministry of statistics and programme implementation report said.

The number of employees joining the National Pension Scheme (NPS) also declined to 64,799 in June from 79,080 in the previous month.

Subscriptions to the NPS from private sector were down 19.6 percent from the previous month, while central government additions fell 33 percent during this period.

Despite the sequential drop and muted performance in June, job addition to formal sector was higher in Q1FY25 compared with the first quarter of the previous year.

EPF scheme recorded 1.2 percent higher new additions from April June quarter of FY24, while ESIC subscriptions were 2.8 percent higher.

Urban unemployment declined marginally to 6.6 percent in the first quarter of FY25 from 6.7 percent in the previous quarter but remained unchanged from a similar period during the previous year, the periodic labour force survey data released by the ministry earlier this month said.

The rise in formal employment corresponds with the reports from the Purchasing Managers’ Index reports, which have been indicating a pickup in job creation compared with the previous year, after a disappointing performance in FY24.

Low employment generation has been one of the concerns of the government, which it also tried to address during the Budget, with announcement of Employment Linked Incentive Scheme.

The Economic Survey, released on July 22, also noted that India needs to create 7.9 million jobs annually till 2030.

Women found more employment in June compared with the previous months.

The share of women in EPF net additions was at 29 percent in June against 25.1 percent in May and 27.6 percent during similar period last year.

Similarly, in ESIC, the share grew to 21.8 percent from 20.9 percent in May and 20.7 percent in June 2023.