Representative Image (REUTERS/Jayanta Dey)
A fall in the number of companies registered with the Employees’ Provident Fund Organisation (EPFO) and the number of EPF members may be indicative of the fact that not all are recovering from the COVID-19 pandemic and lockdowns as quickly.
The number of companies registered with the EPFO fell by 30,825 from 534,869 in September to 504,044 in October, and number of EPF members slipped by 1.8 million in October to number at 45.82 million, against the 47.68 million in September, official data showed.
Notably, numbers have been on the rise since May, till this slump in October, Mint reported.
A government official told the paper that after a “significant fall” in April, registrations by establishments were recovering till September.
“It is a tricky situation as the lockdown had eased by then. It could be due to economic contraction and a larger demand scarcity. In such a situation, they may simply be staying away from paying the EPF contribution as well as to save cost," they said.
Moneycontrol could not independently verify the report.
The source said the situation is the same for contributing members, where the numbers were below pre-lockdown period even in May, but still recovering. “The retirement fund saw the highest contributing members in the current financial year in September,” the official added.
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Experts and economists say the fall is “indicative of a bigger crisis industries are facing,” the report said.
Santosh Mehrotra, a labour economist and retired professor of economics at Jawaharlal Nehru University (JNU) told the paper that numbers may be reflective if companies tabulate data to share with the EPFO now, even though job losses may have happened in earlier months. He also felt an “indication of recovery taking longer… and government support may not be enough. They are closing down permanently or for a short duration, only time will tell."
“At least 50 percent of small-scale industries will most probably fold. There is very little demand in the economy. The government should handhold them, and more so the smallest firms,” Nilesh Desai, vice president of Telangana state confederation of medium, small and micro enterprises (MSMEs) said.
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