India's economy is showing promising signs of recovery, with a notable decline in both annual and quarterly unemployment rates since the peak of the COVID-19 pandemic, according to the latest monthly economic review from the Finance Ministry.
The report highlights a concurrent increase in the proportion of employment within the organised sector, indicating a shift towards formalised employment. This shift is supported by the growing number of net payroll additions recorded by the Employee Provident Fund Organisation (EPFO), where more members are rejoining than exiting the social security net.
A significant factor contributing to this formalisation trend is the creation of digital identities, such as Aadhar, along with initiatives like the e-shram portal for unorganised workers and the Udyam portal for MSMEs. Notably, as of May 22, 2024, over 4.4 crore MSMEs have registered on the Udyam Portal, with micro-enterprises constituting more than 97% of the total.
In FY24, the EPFO recorded a net payroll addition of 1.47 crore members, marking a year-on-year increase of 6.3% compared to the previous period. Of the 1.08 crore new subscribers enrolled during the fiscal year, over half were in the age group of 18–25 years, signalling robust youth employment.
Moreover, a noteworthy trend observed is the higher number of members rejoining EPFO compared to new subscribers or existing subscribers' deletions. In FY24, 1.64 crore members rejoined after previously exiting, indicating a dynamic labour market opting for extended social security protection.
This resurgence in job creation extends beyond the EPFO data, with indications of increased employment opportunities in both the manufacturing and services sectors. The PMI Manufacturing employment sub-index reflects a rise in job creation fueled by improved operating conditions, robust demand, and increased production.
Similarly, the PMI Services sub-index points towards a surge in employment generation driven by domestic demand, new business acquisitions, and improved international sales.
Follow us
