Mumbai: Economists at the country’s largest lender SBI believe that labour market activity will improve in FY22, saying companies are continuing with their hiring plans as the pandemic wanes.
They pointed to payroll data from Employees Provident Fund Organisation and New Pension Scheme, showing an uptick in new additions to support their optimistic view.
“We expect labour market activity to remain better in the current fiscal as companies will continue with their hiring plans to get ahead of the pandemic,” its chief economist Soumya Kanti Ghosh said in a note.
The expectation comes at a time when concerns are being raised about joblessness and the dip in labour participation in the economy coming back to normalcy after the second wave of the pandemic.
As per an estimate by the Centre for Monitoring Indian Economy, 15 lakh Indians, including 13 lakh in rural areas alone, lost their jobs in August alone.
Lack of employment data has been pointed as a concern in India in the past by watchers. In earlier instances, payroll data has been critiqued for restricting to the formal sector in an economy where a bulk of activity is in the informal sector.
The rate of formalisation is now at 10 per cent, while the ratio of first jobs or new payrolls to total payroll was at 50 per cent, indicating every one out of two jobs was a new addition to payroll. This is also an improvement from 47 per cent in FY21, Ghosh said.
The SBI note said India created 30.74 lakh payrolls in the June quarter, which included 16.3 lakh first jobs or new payroll either with EPFO or NPS.
If the new payrolls increase at this rate then the new payroll may cross the 50 lakh mark in FY22, as against 44 lakhs in FY21, the note added.
The good thing is that three indicators of net EPF subscribers have witnessed a jump in Q1FY22, indicating that labour market disruptions were much lower during the second wave of the pandemic, it said.
PTI
