India created 1.46 crore payroll, including 1.38 crore through EPFO and 7.8 lakh through the National Pension System (NPS), in the financial year 2021-22 as compared with 94.7 lakh in FY21, according to a report by SBI Research. It added that women’s enrolment also increased to 27 per cent in FY22.
“When we break-up 138.2 lakhs payroll of EPFO. 60 lakhs were through second payroll, 67 lakhs through first payroll and 11.2 lakhs were through formalisation. In terms of increment, 45 lakh payroll were added in FY22 over FY21. There was an increase in first time payroll by 16 lakh, second-time payroll by 25.8 lakh and formalisation was 1.9 lakh," the SBI Ecowrap said.
It said people are 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 lakh, reflecting the disruptions in the MSME (micro, small and medium enterprises) space was turning the corner.
“NPS data indicates that there was an increase of 1.5 lakhs NPS in FY22 over FY21, after a steep decline in FY21," it said adding that the increased payroll enrolments indicate that the Indian labour market, though faced with massive disruptions in FY21 and FY22, did not do that badly.
The report said the ratio of women’s enrolment-to-total enrolment in the EPFO data remained at 23 per cent in FY20 and did not change significantly in FY21. However, it increased to 27 per cent in the financial year 2021-22. EPFO stands for the Employees’ Provident Fund Organisation.
It said it analysed employee expenses data for more than 2,000 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 in across all companies. This turnaround indicate that companies has started to hire in FY22," the report said.
It said that while the formal jobs declined during the coronavirus pandemic, financial savings increased in FY21. “The financial saving of the household sector – the most important source of funds – surged by 3.6 percentage points to 11.5 per cent of GNDI in FY21, the highest in over two decades."
The SBI report said 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 were seen in Insurance, Provident and Pension Funds, which is a welcome behavioural change.
“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 crores which is a welcome behavioural change," the report said.
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