According to the payroll data of EPFO (Employees’ Provident Fund Organisation), an organization tasked to assist the Central Board of Trustees, Employees’ Provident Fund, the formal employment in India saw an 28.6 % increase at 78.58 lakh in 2019-20 as compared to only 61.12 lakh added in 2018-19.
- The main reason for this is the low withdrawal by EPFO subscribers due to the government’s policy reforms such as implementing GST, allowing fixed income contracts as well as better returns on PF (Provident Fund) deposits.
Highest Increment: Sectors such as Hospitality and Financial Institutions have experienced a 50% growth, while the formalities of the workforce in the textile sector have increased by 20 %.
Key Highlights:
i.Payroll data showed an increase in informal jobs and a more than 16 % CAGR (Compound Annual Growth Rate) increase in organized contract employment over the same period.
ii.According to EPFO, during the fiscal 2019-20 (or 2019) , there has been a substantial increase in the number of individuals who opt out and then join the membership.
iii.GST (Goods and Services Tax) is acting as an incentive for companies that are part of the formal tax framework to derive the benefits that have facilitated job formalization. Other than this, the rate of return on provident fund deposits in the year 2019-20 was 8.5 % and is higher than many social security instruments with fixed deposits.
iv.The Indian Staffing Federation has credited the proactive measures taken by the government in the last two years including GST across all sectors, fixed-term contracts and introduction of Prime Minister’s Employment Scheme- Pradhan Mantri Rojgar Protsahan Yojana.
About EPFO (Employees’ Provident Fund Organisation):
Headquarters– New Delhi
Central Provident Fund Commissioner– Sunil Barthwal
