A Fall in the number of EPFO Subscribers in Oct

As official reports, the number of contributing establishments with retirement fund manager EPFO decreased to 504,044 in October from that of 534,869 in September.

The fall of the establishments registered with the Employees’ Provident Fund Organisation (EPFO) by more than 30,800 in October comparing to September, shows that it takes a lot of time and effort before the companies can quietly recover and retrieve the losses caused by pandemic; also they are shedding the jobs because of the continuity of pandemic.

Since the first of the May, when the country went into lockdown, the fall started. The condition were moving forward gradually month over month until the fall in October.

Moreover, the number of workers or members contributing to the pension fund also fell down by 1.8 million in October from that of 47.68 million in September; it means a sum of 45.82 million lesser than last month.

According to a government official, who declined to be named, “After a significant fall in April in the number of registered establishments, the number was recovering every month till the end September; but in October, it has gone down. It’s a tricky situation as the lockdown had eased by then. It could be due to economic contraction and a larger demand scarcity. In such a situation, they may simply be staying away from paying the EPF contribution as well as to save cost."

The official stated that “Similarly, the number of contributing members was going up since May after falling drastically in April but was still below the pre-lockdown period even in September when the retirement fund saw the highest contributing members in the current financial year."

Industry experts and economists argued that the fall in contributing establishments is a clear indication of the economic environment but said this could be part of the bigger crisis industries are facing.

Santosh Mehrotra, a labour economist and retired professor of Economics at Jawaharlal Nehru University, said that: “The number looks like an indication of how companies’ recovery from the downturn is taking longer and how government support may not be proving enough to accelerate this recovery."

Mehotra Added that: “In the first quarter, GDP contracted by almost 24%; and in the second quarter, there has been a forecast that it will contract almost 9%. This shows companies are struggling and less than expected demand revival must have pushed companies to either cut headcount or close down. They are closing down permanently or for a short duration, only time will tell."

 “The jobs crisis is real, graduate unemployment is high, and millions have lost regular jobs. It may have got registered in a particular period or month due to companies tabulating those data and sharing with EPFO. But remember that EPFO gives you the picture of a portion of the formal sector."