MUMBAI: Fewer jobs may get created in FY'20, going by the payroll data. A research note by State Bank of India says that new pay rolls created in 2019-20 could be over 20 per cent less than 2018.
The revised format, EPFO which has been publishing the data since September 2017, also includes data on those who have exited and re-joined on or after September 2017. The SBI research not by its chief economic advisor, S K Ghosh says that the EPFO data may not hence depict the true picture. While the EPFO data suggests that annualised new enrolments could be 106.2 lakh crore for FY’20, the SBI research team calculations show that actual annualised net new payroll could be 73.9 lakhs, about 21 per cent or 15.8 lakh lower than actual net new pay roll generated in FY’18. SBI also said that even data from NPS indicates that there would be a decline of 26,490 in new subscribers.
The government first started publishing monthly pay roll data for September 2017 onward from April 2018 using records of EPFO, ESIC and NPS.
These trends have several implications for the economy, the report says. The extent of formalization has declined steadily and is now currently at 9.5% of the overall payroll creation (11% in FY19). This could impact the GST collections and are unlikely to touch the Rs 1.1 lakh crore threshold that the government expects in coming months. Also lower payroll creation in the government sector indicates that the Government is not recruiting to replace retiring Government employees.
It is possible that the delay in resolution cases under IBC may have prompted companies to downsize their contractual labourers. ” Seventh, EPFO should take utmost care to remove the niggling problems with the EPFO data” Ghosh said.
The report also estimates that labour productivity growth was stagnant during FY15-FY19 and such low and stagnant productivity encourages over-borrowing by corporations and households, only to deleverage later.