The Ministry of Statistics and Programme Implementation (MoSPI) recently released the latest official data, revealing a decline in new additions to formal sector employment in October. This decline is evident across three key data sets: Employees’ Provident Fund (EPF) Scheme, Employees’ State Insurance Corporation (ESIC), and National Pension Scheme (NPS). This trend is occurring at a time when the Indian economy is anticipated to achieve rapid economic growth, with the Reserve Bank of India and the International Monetary Fund both projecting significant GDP growth rates.
Since April 2018, the government has been publishing formal sector employment-related statistics sourced from the EPF Scheme, ESIC, and NPS. The data for October reveals a concerning trend, with all three schemes experiencing a decline in new subscribers.
The EPF Scheme witnessed a nearly 17 percent decline in new additions in October compared to the previous month, while new additions to the ESIC scheme experienced a 9 percent decline. The NPS also saw a 3.2 percent decrease compared to September.
This decline in new subscriptions to formal employment schemes is indicative of weak demand in the employment sector. The implications of this trend are significant, especially given the current economic growth outlook for the country.
Historically, the formal employment sector in India has been closely linked to economic growth and development. A decline in new additions to formal schemes may indicate a stagnation or slowdown in economic activity, underscoring the need for measures to boost employment and stimulate demand.
In conclusion, the decline in new additions to formal sector employment schemes in October is a cause for concern, particularly in the context of India’s projected economic growth. It reflects the need for policy interventions aimed at revitalizing the job market and ensuring sustained economic expansion.
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