Fresh enrollments under retirement fund body, Employees Provident Fund Organization (EPFO), during May 2021 dropped to 5.72 lakh, the lowest since June last year.
This, labour experts said, reflects the impact of the second wave of the COVID-19 pandemic on the job market.
In June last year, new enrollments stood at 5.64 lakh at a time when the country was under the grip of the severe first wave of the pandemic.
Fall in the number of fresh subscribers under EPFO is an indication of a drop in job creation in the economy.
New subscribers to EPFO during 2019-20 stood at 1.10 crore, but it came down to 85.48 lakh in 2020-21, the year COVID-19 struck India for the first time.
Speaking on conditions of anonymity, a senior research fellow from a Delhi-based think tank, said: “This drop is primarily due to the state wise lockdown restrictions announced during the second wave. However, one must note that it only captures the slowdown in job creation for EPFO-registered establishments.”
“While it is good that the government has extended the EPFO wage subsidy (Atmanirbhar Bharat Rozgar Yojana) scheme till next year, it should at the same time consider a direct benefit transfer (DBT), which would put more money in the hands of the people resulting in demand creation, thereby incentivizing employment generation. Moreover, it would cover all the units and not only those that are registered with EPFO,” he added.
Aamanirbhar Bharat Rozgar Yojana
Finance Minister Nirmala Sitharaman on November 12, 2020 announced the Atmanirbhar Bharat Rozgar Yojana. The scheme offers subsidies to employers for hiring new employees. It also aims to help those who lost jobs in the wake of the pandemic.
Under this scheme, the central government will take care of the provident fund contributions of employees and employers for two years from the date of registration.
The scheme is aimed at incentivizing the creation of new employment opportunities during the COVID-19 recovery phase, wherein the government will give the subsidy for new employees joining an EPFO-registered establishment, who have a monthly wage less than Rs 15,000, who lost jobs due to the COVID-19 pandemic and regained employment after October 1, 2020.
Under the scheme, for establishments employing up to 1,000 workers, the central government will provide employee’s contribution at 12 percent of the wages and employer’s contribution at 12 percent of the wages, thereby covering a total of 24 percent of the wages for a period of two years.
On June 28, the Finance Minister extended the scheme from June 30, 2021 to March 31, 2022.
On July 19, the new Labour and Employment Minister, Bhupender Yadav, in a written response to a parliamentary question, informed the House that so far a benefit of Rs. 993.26 crore has been provided to 22.57 lakh employees through 84,390 establishments under the scheme.
Said Prashant Singh, Vice President and Business Head-Compliance and Payroll Outsourcing, TeamLease Services: “The drop in numbers is largely due to state wise and phase wise lockdown. The extension of ABRY till next March would surely help as industry is getting ready to revive businesses and the economy.”
Implementation of labour codes and such scheme would surely help to boost the enrollment, Singh added.
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