India records 5.2 crore new formal jobs in FY20-23: Report

India's Economy Sees Remarkable Growth with 52 Million New Formal Jobs Between FY20 and FY23, According to Comprehensive Analysis of EPFO, NPS, and ESIC Data

In a recent report, it has been revealed that India experienced a substantial increase in formal employment, adding approximately 52 million new jobs between the fiscal years 2020 and 2023. This net addition of 27 million jobs was based on a comprehensive analysis of data from the Employees Provident Fund Organisation (EPFO), the National Pension Scheme (NPS), and the Employees State Insurance Corporation (ESIC).

Since April 2018, the Indian government has been releasing monthly payroll data from these organizations, following the recommendations outlined in the Ghosh & Ghosh report.

The analysis of EPFO payroll data from the past four years indicates that the net addition of new EPF subscribers during FY20-23 was 48.6 million, encompassing fresh job entrants, rejoining or resubscribing members, and formalized payrolls. After adjusting for re-joined/re-subscribed members and formalization based on ECR data, the actual net new payroll was 22.7 million during FY20-23, as stated in a report by SBI Research.

Among these, first-time jobs accounted for 47 percent of the total net new payroll additions, while second jobs (members who re-joined or re-subscribed) amounted to 21.7 million during this period. This indicates a net increase in formalization of 4.2 million jobs during these four years, as highlighted in the report authored by the Group Chief Economic Advisor to the SBI, Soumyakanti Ghosh.

The report also cites encouraging trends in the Q1 EPFO payroll data for FY24, where 4.4 million net new EPF subscribers joined, including 1.92 million first-time payroll entrants. If this trend continues for the rest of FY24, the net new payroll could exceed 16 million, marking a historic high, with first-payroll additions ranging from 7 to 8 million.

Data from the National Pension Scheme (NPS) reveals 8.24 lakh new subscribers in FY23, with state government payrolls contributing 4.64 lakh, non-government jobs at 2.3 lakh, and 1.29 lakh in the central government.

Over the past four years, approximately 3.1 million new subscribers joined the NPS. In cumulative terms, the total payroll generation for both EPFO and NPS during FY20-23 exceeded 52 million, according to Ghosh.

Furthermore, the report notes a significant decline in the number of members rejoining or resubscribing in the first quarter of the current fiscal year, suggesting that more individuals may be opting to remain in their current employment. Additionally, women's payroll constituted around 27 percent of the total.