Net employment creation in the formal sector stood at 3.18 lakh in May 2020, shows data released by the Employees' Provident Fund Organisation (EPFO). As per the updated data, 3.10 lakh jobs were created in the same month in 2019, while 3.88 lakh EPF subscribers were added in May 2018.
During the month of May, 2,79,023 new members joined the EPF scheme while 2,36,213 members exited the scheme. However 2,75,979 members re-joined and re-subscribed to the EPF scheme.
The highest net additions in May 2020 were made in the age group of 29-35 years followed by more than 35 years, 18-21 years, 22-25 years, 26-28 years and less than 18 years.The states where most of these jobs were created are Maharashtra Gujarat, Karnataka, Tamil Nadu, Telangana and Haryana.
Provisional payroll data released by the EPFO for the previous month (April) had shown that net new enrolments stood at 1,33,080. The figure has now been revised downwards to 1,00,825; a correction of 32,255 jobs. In April 2019, 4.99 lakh jobs were created whereas in April 2018, 4.86 lakh net jobs were created.
In the current financial year (FY21), job creation has taken a severe hit amid a global pandemic. As it's evident from the EPFO's payroll data, only 4,19,614 net jobs have been created. This too is subject to revision in further EPFO releases. On average, only 2.09 lakh jobs have been created every month, in the first two months of FY21. While in the previous fiscal, 6.54 lakh jobs were created on average. Implying a 68% drop in average job creation in the first two months of FY21 after coronavirus pandemic.
In the pre-pandemic months of January 2020 and February 2020, 9.98 lakh jobs and 10.21 lakh jobs were created.
Meanwhile, according to CMIE, the unemployment rate has reached new high post coronavirus pandemic. In the first two months of FY21 the unemployment rate exceeded 23% while it was a tad higher than 7% during the pre-pandemic months of January and February 2020. In the month of June 2020 the unemployment rate has fallen sharply and stands at 10.99%.
According to a statement released by Labour Ministry in June, the Employees' Provident Fund Organisation (EPFO) has settled 36.02 lakh claims during coronavirus lockdown, disbursing an amount of Rs 11,540 crore under the EPF scheme. Out of this, 15.54 lakh claims amounting to Rs 4,580 crore were related to the recently introduced COVID-19 advance under Pradhan Mantri Garib Kalyan Yojana (PMGKY).
In terms of wage slab, nearly two-third of total claimants during the lockdown period belonged to less than Rs 15,000 wage bracket. The high income category with wages more than Rs 50,000 accounted for a mere 2% of the claimants. A quarter of claims were made by the members with wages falling between Rs 15,000 and Rs 50,000, the ministry said.
In March, the labour ministry had announced that about 4.8 crore EPF beneficiaries can withdraw 75% of the amount standing to their credit, not exceeding their three months' basic pay, to tide over the COVID-19 pandemic. The ministry had issued a notification in this regard to amend the Employees' Provident Fund Scheme 1952, so that organised sector workers can withdraw the non-refundable advance.
EPFO has been releasing the payroll data of new subscribers since April 2018, covering the period starting from September 2017. The data also showed that during September 2017 till May 2020, the number of net new subscribers was 1.59 crore. The estimates are net of the new members enrolled, members exited and rejoined during the month, as per records of EPFO.