Blitz Bureau
NEW DELHI: Formal employment in India seems to have gained pace as data from Employees Provident Fund Organisation (EPFO) and National Pension System (NPS) has shown significant increase, as per a Businessline report.
According to EPFO, despite a drop in Fiscal Year 2023-24 on year-on-year basis, number of new subscribers doubled in the said year as compared to Fiscal Year 2018-19. It was 61.1 lakhs in FY 19 which surged to over 1.31 crore in FY24. The net addition of subscribers during last six and half years (since September, 2017 to March, 2024) is more than 6.2 crore.
It may be noted that organisations with 20 or more employees are mandatorily required to enroll their workers under EFP. It is voluntary for organisations with less than 20 employees. Also, EPF account registration is mandatory for salaried employees with an income of up to ₹ 15,000.
According to Balasubramanian A, Vice-President, TeamLease Services, the number of contributing members to PF has been growing at a CAGR of over 20 per cent since 2018, whereas the overall workforce has grown at about 2 per cent in the same period. Clearly, there has been growing formalisation of the workforce. One of the key factors driving this trend is the need felt by a large employers to have an organised, engaged and productive workforce with low attrition. Ensuring payments of statutory compliances ensuring social security, is a crucial contributor to stickiness.
“While this may cost more at the outset, it pays off by delivering greater business value overall. This wave of formalisation has picked up greater momentum post pandemic and several industries such as FMCG, Healthcare/Pharma, Retail, Industrial Manufacturing etc have prioritised this with alacrity,” he said, adding that he expects this momentum to continue in the future as well.
