The EPF payroll data released by the government every month provides data on the number of new subscribers to EPF, the number of exits, the number of re-joinees and the net payroll figures. Data indicates that the number of re-joinees in 2021-22 was almost 25 lakhs more than the number of new subscribers.
After around two years in the shadows of the COVID-19 pandemic, the year 2022 marks the emergence and recovery in most countries. Economic recovery is among the top priority across countries, because of its impact on most sectors.
Loss of livelihood has been one of the gravest impacts of the pandemic. Therefore, the levels of employment are a good indicator to measure the recovery from the pandemic. A forecast by the International Labour Organization (ILO) at the beginning of 2022, downgraded its own earlier forecast of labour market recovery for 2022. However, the downgraded forecast is still an improvement over 2021.
What is the situation in India?
In one of our earlier stories, we analysed the trends in EPFO member subscriptions released by the Employees’ Provident Fund Organization (EPFO) to understand the employment situation in the country. In this two-part series, we look at the latest data from EPFO for our analysis. In the first story, the broader trends in EPF membership are analysed.
Significant increase in the number of re-joinees during 2021-22, compared to new joinees
The EPF scheme is a contribution-based scheme, where-in employees pay a certain part of their salary towards EPF. One needs to be formally employed to be able to make the EPF contribution. In case an employee leaves the employment, he/she ceases to be part of EPF. The individual can join back EPF scheme if they take up new employment. While a new EPF number is assigned for re-joining, their Universal Account Number (UAN) ensures that the system knows that a person is re-joining the scheme. In the EPF data released by EPFO, anyone gaining employment and joining EPF for the first time are categorised as a ‘New EPF subscriber’. Whereas those who have exited and re-joined in employment with EPF contribution are categorised as ‘members who re-joined and resubscribed’.
As per EPFO’s latest Provisional Monthly Estimate of Payroll Reports as of October 2022, there is an increase in the number of new subscribers during 2021-22 compared to 2020-21. In 2021-22, there were a total of 1.08 crore new EPF subscribers. This is a 27% increase over 2020-21 when this was 0.85 crores. It ought to be noted that there was a fall in new subscribers in 2020-21, due to the pandemic-induced slowdown. Despite the recovery, the number of new subscribers is still lower than in the pre-pandemic years of 2018-19 and 2019-20, when it was 1.39 crores and 1.1 crores respectively.
There is also an increase in members who have exited EPF. In 2020-21, a total of 97.8 lakh members exited the scheme while 2021-22 increased to 1.19 crores. However, the more significant trend is relating to the re-joined members. In 2018-19, the number of re-joinees was significantly lesser than the new subscribers. The number of re-joinees were only about a third of the new subscribers. However, this changed completely in 2021-22.
Early trends of a change in this ratio were visible in 2019-20, with an increase in those who have re-joined, while there was a fall in the number of new subscribers. However, the number of re-joinees was still lower than the number of new subscribers. But in 2020-21, the number of those who re-joined exceeded the number of new subscribers. This difference increased substantially in 2021-22 when there were 1.33 crore re-joinees compared to 1.08 new subscribers. Meanwhile, the net payroll for 2021-22 has increased by 59% compared to 2020-21.
The increase in the number of re-joinees during 2020-21 compared to the new subscribers, can be attributed to people finding new jobs after losing employment during the pandemic. The lower number of new subscribers is indicative of the lower availability of jobs for first-time job seekers. The trend seems to have continued and intensified in 2021-22. The increasing number of re-joinees reflects existing job holders changing jobs.
Monthly data for 2022-23 indicates increase in Net Payroll compared to same period in previous years
A broader trend for 2022-23 indicates that there is an improvement in the net payroll figures compared to the previous year. However, the trends vary across the different types of EPF membership. Overall, there is an improvement in the ‘Net Payroll’. Data not only shows a month-on-month increase in 2022-23, but the numbers are higher compared to the earlier years.
During April & May of 2020-21, the impact of the pandemic has resulted in negative Net Payroll. The situation improved in 2021-22 and further improved at the beginning of 2022-23. The same can be said for the rest of the months i.e., June-August.
While the number of new subscribers during the first five months of 2022-23 is comparatively higher than the same period in previous years, there is a fall during August 2022, compared to July 2022. There was also a similar but lesser dip in the previous year as well. It is to be seen if the trend continues in the ensuing months. The situation relating to exited members has also improved with not only a monthly decline during 2022-23 but also comparatively lower numbers than the same period in previous years.
On the other hand, varying trends are observed in the case of re-joinees. There is a comparative increase in the number of re-joinees to EPF during April-August’2022 compared to the same period last year. As already highlighted, there is a substantial increase in the number of re-joinees during 2022-23. If the trends for the initial months of 2022-23 hold for the rest of the year, there could be a much higher number of re-joinees in 2022-23. The increase in re-joinees for the first five months is higher than the increase in new joinees. This indicates a prospective higher re-joinee to new subscribers ratio than 2021-22. However, there is also a decline in the number of re-joinees during July & August 2022 compared to earlier months. As in the case of new subscribers, it remains to be seen if the trend persists in the coming months.
Higher increase in new Female subscribers compared to Male
The EPF Payroll data also provides the gender-wise figures of EPF subscribers. The broader gender trends are also in-line with the overall yearly trends i.e., there is a fall in the number of new subscribers and re-joinees during 2020-21 while the numbers improved substantially in 2021-22.
A deeper look into these numbers shows varying trends.
- Among males, there is an increase in the number of new subscribers in 2021-22, after a decline in the numbers during the pandemic hit 2020-21.
- However, this increase is much lower than the increase in the number of re-joinees. This conforms with the overall trend highlighted earlier in the story. It ought also to be noted that there is also an increase in those who exited EPF.
- In the case of females, there is a significant increase in the number of new Subscribers to EPF in 2021-22 compared to 2020-21. The number is nearly at par with the number in 2018-19. Meanwhile, the number of those who have re-joined has also increased significantly in 2021-22.
Age-wise analysis of the EPF data would be useful to understand the new subscribers. In the next story, we look at the age-wise trends of the EPF numbers along with industry-wise trends.