New Delhi, Jan 13 : With the Indian economy expected to expand at five per cent in Fiscal 20-21, the country could create at least 16 lakh less payrolls during the period, a report from the Economic Research Department of State Bank of India revealed on Monday. The slow growth is now having a visible impact on payroll creation.
In FY 2019-20, India had created 89.7 lakh new payrolls, as per the EPFO data. In FY20-21, as per current projected, this number could be at least 15.8 lakh lower, said the report. The EPFO data primarily covers low paid jobs, as the salary is capped at Rs 15,000 per month. Government jobs, State Government jobs and Private jobs are not part of this ambit, as such data have moved to the National Pension Scheme (NPS), beginning 2004.
''Interestingly, even in the NPS category, both the state and the Central government are supposed to create close to 39,000 jobs less in FY20, as per current trends. Hence, the number of new payroll created in FY20 could be at least 16 lakh lower than in FY19,'' the report stated. There are several trends that are apparent from the payroll data.
First, the payroll creation is the sum of the existing and new payroll, with existing payroll the aggregation of extent of formalisation and second job. New payroll is the first payroll creation. The extent of formalisation has declined steadily and is now currently at 9.5 per cent of the overall payroll creation (11 per cent in FY19).
The extent of formalisation could decline further and this implies that GST collections are unlikely to recover significantly towards the Rs 1.1 lakh crore threshold that the government expects in coming months.
The number of second payrolls is increasing significantly and this, coupled with the projection of a lower new payroll creation in FY20, indicates the possibility that adequate new payrolls are not being created. (UNI)