Home >News >India >Fresh payroll additions in March at a 4-month low

NEW DELHI : The number of new workers who joined the formal workforce in March was the lowest in four months, provisional payroll data of the Employees Provident Fund Organisation (EPFO) showed, reflecting how the job market was stretched as the second wave of the pandemic hit the nation.

A total of 716,223 people joined the formal workforce in March against 807,482 in February, recording a fall of more than 91,000 new payroll additions.

The payroll data showed that more than 37% of the drop in new workers in March was in the crucial 18-25 age group, usually first-timers in the labour market.

According to official data, while 432,660 new workers in the 18-25 age group had joined formal work in February, the figure came down to 398,516 in March, a fall of around 34,000.

Experts argued that the payroll numbers for April and May could be worse as the high covid caseload and subsequent curbs halted economic activity.

“The new subscriber additions will face a sizable crunch in April and May as we have witnessed high caseloads, low economic activity, production cut in sectors like auto and auto ancillaries and a dip in consumer sentiments," said K.R. Shyam Sundar, a labour economist.

Shyam Sundar, however, said that EPFO payroll data does not give an overall picture of the labour market and that there are both “anecdotal evidence and CMIE data to show that job creation got hammered in the last fiscal".

EPFO said the net payroll addition in March was 1.12 million, much higher than new payroll additions. But again, the net payroll addition of March is marginally less than February’s net payroll additions. EPFO said the March net payroll numbers showed a month-on-month revival in sectors such as iron ore mines, courier services, restaurants, motor transport, petroleum and natural gas refining.

Net payroll addition is arrived at by taking into account new additions, the number of exits and those re-joining. Experts argue that it fluctuates more than new additions.

According to EPFO, the 2020-21 net payroll additions was 7.7 million, which is almost 150,000 less than the net payroll additions in the previous year. To be sure, the payroll data released every month is termed provisional, and some numbers may change over the next few months.

“Quarterly analysis of payroll for FY2020-21 indicates that net subscribers’ addition improved consistently from 2nd quarter after taking a hit in the 1st quarter due to crisis of Covid19 pandemic. Maximum improvement of 33.64 lakh net subscribers’ addition was observed during the fourth quarter," EPFO said in a separate statement.

“You have to look at the net subscribers’ additions in FY21 with a pinch of salt. Yes, it shows demand for work, but most of these additions were from short-term employment contract in sectors like logistics and courier services, e-commerce and other support service sectors. Yes, they added to family income, but they are not going to stay for two or three years. They were formal jobs as organized online platforms hired many, but they are not decent jobs," said Shyam Sundar.

According to the Centre for Monitoring Indian Economy, the overall labour force during 2020-21 was a little over 424 million, almost 17.5 million less than in 2019-20.

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