The formal job sector saw limited growth in 2023, with only a 2% increase in net payroll additions compared to the previous year. Job creation varied across different states, with states like Uttar Pradesh, Uttarakhand, and Jharkhand experiencing a rise in job numbers, while Andhra Pradesh and Karnataka saw a decline. The data from the EPFO portal reflects the number of employees in the formal sector, where organizations with more than 20 employees are required to register. The EPFO manages the mandatory provident fund and pension scheme, with contributions from both employees and employers. The analysis of monthly payroll data considers new member additions, existing member exits, and re-joined members to calculate the net payroll numbers.
A closer look at the data reveals a significant increase in job numbers in states like Uttarakhand, Jharkhand, and Uttar Pradesh, while states like Andhra Pradesh and Karnataka experienced a decrease. Despite Tamil Nadu employing a large number of people in the formal sector, there was a slight decrease in net payroll additions in 2023 compared to the previous year. Economists point out that the increase in job numbers in certain states may be due to the formalization of the economy rather than actual job creation.
Experts also note that the overall job creation in the country has been stagnant, with fewer new additions to the formal workforce in 2023 compared to 2022. While the Indian economy is showing stable growth, the number of new entrants to the workforce has decreased slightly. This suggests that job creation in the formal sector remains flat.
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