EPFO data government cited to show job surge is now down

EPFO manages social security funds of workers in the organised/semi-organised sector in the country. EPF is applicable to establishments with more than 20 workers.

The Employees’ Provident Fund Organisation’s (EPFO’s) enrolment numbers, which formed the basis for an ‘independent’ study released earlier this year that the government cited as an indicator of buoyancy in formal job creation in the economy, has now been sharply whittled down for each of the six months where data was released subsequently.

The downward revision in net enrolment numbers that range from 6 per cent to 21 per cent for each of the months between September 2017 and March 2018 has baffled those within the government, with the Ministry of Statistics and Programme Implementation (MoSPI) writing to the EPFO, seeking reasons for the downward revisions.

Cumulatively, for September-March 2017-18, the total net enrolment has been reduced by 12.58 per cent or 4.95 lakh to 34.40 lakh as against 39.35 lakh estimated earlier, fresh data released on June 25 showed.

While initial indicators point to duplications having been weeded out of the EPFO enrolment data and the numbers have been linked with Aadhaar, two government officials admitted that ideally such sharp revision should not have happened. “MoSPI has written to the EPFO asking for the reason but there is no reply yet,” one of the officials said.

The EPFO enrolment numbers along with data of Employees’ State Insurance (ESI) Scheme, National Pension System (NPS), General Provident Fund (GPF) were the basis for a study titled, Towards a Payroll Reporting in India by Soumya Kanti Ghosh and Pulok Ghosh in January this year, which had estimated that around 70 lakh jobs might be created in 2017-18.

On the basis of EPFO data, the study had estimated that 36.8 lakh new subscribers in the age band 18-25 years had enrolled during April-November 2017 and extrapolating it for the full year, they had estimated that 55.2 lakh new subscribers would be enrolled in 2017-18. In his Budget speech for 2018-19, then Finance Minister Arun Jaitley had cited the study saying, “An independent study conducted recently has shown that 70 lakh formal jobs will be created this year.”

In its release dated June 25, the third in the series, the MoSPI said the net EPFO enrolment number for April stood at 6.85 lakh, the highest in the months since September 2017 or the month since the data has been released by the government. A closer look at the changed enrolment numbers in percentage terms reveals that barring January, the gap between initial and latest enrolment numbers has widened from 7.88 per cent in November to 13.33 per cent in December, going up to 15.24 per cent in February and then to 21.59 per cent in March.

Queries sent by The Indian Express to EPFO, Ministry of Statistics and Programme Implementation and Ministry of Labour and Employment remained unanswered.

Reached for a comment, Soumya Kanti Ghosh, group chief economic advisor, State Bank of India and co-author of the study on payroll reporting, said it could be a case of establishments reporting attrition with a lag vis-à-vis reporting about joining of employees.

“The numbers are provisional and are bound to be updated. The EPFO is releasing enrolment numbers on a net basis, so it might be the case that companies are reporting leaving of employees with a lag, while the joining of employees is being reported immediately. This is a good sign, it indicates churn in employment cycle,” Ghosh said.

He reiterated that there was “no duplication” in the EPFO enrolment data September onward and has been completely linked with Aadhaar.

“There’s no duplication in the EPFO data. Before September, the EPFO data was not clean, that’s why it is being released September onward,” he said. The MoSPI had released the EPFO enrolment data for September-March, the second in the series, on May 25. The first set of payroll data was released by the EPFO in April.

In April, the government while releasing the first set of EPFO enrolment numbers for September 2017-February 2018 had said the initiative is to report the “progress made in formal employment using measurable data from administrative records” of the subscribers who have availed benefits under three major schemes, namely, the Employees’ Provident Fund, Employees’ State Insurance Scheme and the National Pension System.

The MoSPI, in its latest release, said the levels of employment are from various sources, there are elements of overlap and the estimates are not additive. “The information is based on the number of subscribers and as the schemes provide for earlier payments, the tables reflect a dynamic status,” it said.

Though the members’ data above are linked to Aadhaar, the estimates may include temporary employees whose contributions may not be continuous for the entire year, the EPFO said in its footnote for the data.

“Data for most recent months are provisional as updation of employees records is a continuous process and are likely to be updated in subsequent month/s. This is age-band wise data of all non-zero contributors that are registered under EPFO during particular month. For each age-wise band, the estimates are net of the members enrolled and ceased during the month as per records of the EPFO,” the footnote stated.

EPFO manages social security funds of workers in the organised/semi-organised sector in the country. EPF is applicable to establishments with more than 20 workers. The EPFO has more than 6 crore active members with at least one month contribution during the year.

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