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India's labour market has not done that badly last fiscal

As many as new 146 lakh payroll have been created during FY22 as against 94.7 lakh in FY21: SBI study

India’s labour market has not done that badly last fiscal

India’s labour market has not done that badly last fiscal

Mumbai: As per EPFO and NPS, India created 146 lakhs payroll (sum of 138.2 lakhs through EPFO and 7.8 lakhs through NPS in FY22) as against 94.7 lakhs in FY21, indicating Indian labour market, though faced with massive disruptions in FY21 and FY22, did not do that badly.

Of the new 138.2 lakh payroll of EPFO, 60 lakhs were through second payroll, 67 lakhs through first payroll and 11.2 lakhs were through formalization.

In terms of increment, 45 lakh payroll were added in FY22 over FY21. There was an increase in first time payroll by 16 lakhs, second time payroll by 25.8 lakhs and formalization was 1.9 lakh. This clearly indicates that people were coming back to the labour market in later part of FY22, as the situation had improved at that time. The rate of formalization also increased by 1.9 lakhs, reflecting the disruptions in the MSME space was turning the corner.

Fourth, NPS data indicates that there was an increase of 1.5 lakhs NPS in FY22 over FY21, after steep decline in FY21. The ratio of women enrollment to total enrollment in EPFO data has remained at 23 per cents in FY20 and has not changed significantly in FY21 but increased to 27 per cent in FY22.

"We also analysed employee expenses data for more than 2000 listed companies and found out that barring the very small companies (turnover up to Rs 50 crore) employee expenses have increased in double digits in FY22. In FY21, barring big companies (turnover more than Rs 1000 crore) employee expenses had declined across all companies. This turnaround indicates that companies has started to hire in FY22," Soumya Kanti Ghosh, SBI group's chief economic advisor said.

Meanwhile, the financial saving of the household sector – the most important source of funds – surged by Rs 6.91 lakh crores during FY21. The reduction in discretionary spending amidst the pandemic and the associated forced saving as well as a surge in precautionary saving on concerns relating to income flows in the near-term boosted saving by households. Most noticeable increase apart from deposits that surged Rs 3.4 lakh crores, were seen in insurance, provident and pension funds that surged by Rs 1.91 lakh crore which is a welcome behavioural change.

Kumud Das
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