New Delhi: At least six million people, about 4.6 million of them under 35 years of age, left their formal jobs in the 10 months ending June and may or may not have rejoined work, according to payroll data released by the government on Friday.

This is the first time since payroll data was first released in April that the government has shown the number of people leaving the formal workforce, extrapolating data from the retirement fund manager Employees Provident Fund Organization (EPFO).

The government said that while 10.7 million employees had joined EPFO between September 2017 and June 2018, at least 6.04 million stopped subscribing to it.

The government has in recent times used the EPFO data as a key parameter to count formal job creation or loss.

The government did not specify the reason for so many people leaving EPFO. However, the age classification of such people ending their subscription to the EPFO shows that most of them are not of retirement age.

“India does not have a fool-proof system to calculate jobs. EPFO data is one of the several parameters. The fact is, if you call new subscribers as new jobs then you have to term those ceasing subscription to EPFO as job loss," said a government official who requested anonymity.

The official, however, said that there are several factors that may have contributed to this, including contractual jobs in sectors such as textiles and construction, change of jobs from formal to informal because of wage differences, and retrenchment because of several factors including automation.

The quality of jobs has been a nagging issue for India’s labour market and several agencies, including the International Labour Organization and the World Bank, have flagged the dire need for quality jobs in India.

The latest data again shows why EPFO data should not be used by the government as an yardstick of job creation as it merely points to a social security provision, said Himanshu, an associate professor at the Jawaharlal Nehru University.

“The number of members that ceased subscribing to EPFO may have joined a different industry where EPFO is not mandatory or may have become self-employed or have lost their jobs. This again raises the question whether EPFO data should be used as data for employment generation," he said.

What is interesting is that the government revised the payroll data once again for all the nine months released earlier. While in July it said that 4.47 million people joined the formal workforce in the nine months ending May 2018, on Friday it revised the number to 9.69 million, more than double the previous estimate.

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