India’s formal job creation kept pace in the first half of the year, with new additions across the three social security schemes rising compared with the previous year's similar period, despite September numbers showing a further dip in formal job additions.
New enrollments to the Employees’ Provident Fund scheme, which applies to larger organisations and better-paid employees, rose 2.3 percent in H1FY25 from a similar period last year, adding 6.1 million employees.
New subscriptions to Employees' State Insurance Corporation, which applies to smaller organisations and lower-paying cohorts, grew even faster with 9.3 million additions in H1FY25, up 5.2 percent from 8.8 million in the previous fiscal.
Subscriptions to the National Pension System were also 6.8 percent higher.
Worrying trend for September
While the formal job additions show a strong economy in the first half, data from the July-September quarter indicates a slight slowdown.
HSBC data released in August and September showed a weakening in service and manufacturing activity, which was also characterised by a slowing job market.
New enrollments to the EPF scheme were flat in the second quarter of FY25 compared with Q2FY24, with the additions dipping to the lowest level of 0.95 million in September from 0.98 million in the previous month.
New enrollments at the ESIC scheme were also the lowest in five months, at 1.5 million, compared with 1.52 million the previous month.
The Indian economy grew at a slightly slower pace of 6.5 percent in the second quarter compared with the 6.7 percent growth witnessed in Q1FY25.
However, new enrollments to ESIC were up 6.8 percent in the second quarter of FY25 compared with the second quarter of FY24, indicating a better market for low-paying jobs or growing formalisation.
Urban unemployment data released by the ministry a fortnight ago showed unemployment declining to its lowest level of 6.4 percent in urban areas in the second quarter of FY24. The trend also coincided with a rise in people doing wage or salaried work.
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