New payroll additions to the Employees Provident Fund Organisation (EPFO) were the lowest in November in at least five months, the payroll data suggested. This is despite an EPF-based wage subsidy scheme also known as the Aatmanirbhar Bharat Rozgar Yojana, that the government introduced in October to spur fresh employment.
Only 640,527 workers joined the formal workforce for the first time in November, as per the data. In October, the new additions to the EPFO stood at 769,670; in September it was 1,142,887, in August at 745,058 in August and 681,540 in July.
According to Prashant Singh, Vice President and Business Head- Compliance and Payroll Outsourcing, TeamLease Services, the reason for slow additions could be a seasonal increase in hiring of gig workers.
"November being a festive season, the main focus of start-ups, tech companies and retail had been on gig workers to boost immediate sales and delivery," he said.
"Certain industries and categories like manpower companies, private security companies and contractors continue to be the biggest hirers while industries like real estate, engineering contractors are still picking up," Singh added.
The new additions to the payroll dropped by 16.7 percent month on month. This is the second consecutive month of drop in fresh additions to the EPFO.
Finance Minister Nirmala Sitharaman on November 12 announced the Aatmanirbhar Bharat Rozgar Yojana, aimed at incentivising the creation of new employment opportunities during the COVID-19 economic recovery phase.
“Under the new scheme, the government will provide subsidy by way of EPF contributions for all new eligible employees. The subsidy will be credited upfront in Aadhaar-seeded EPFO accounts,” Sitharaman said.
Under the Aatmanirbhar Bharat Rozgar Yojana, for the establishments employing up to 1,000 workers, the central government will provide employee’s contribution at 12 percent of the wages and employer’s contribution at 12 percent of the wages thereby covering a total of 24 percent of the wages for a period of two years.
An employee drawing monthly wage of less than Rs 15,000, who was not working in any establishment registered with the Employees’ Provident Fund Organisation (EPFO) before October one, 2020, will be eligible for the scheme.