Opinion | EPFO’s bid to publish payroll data is a gift to policymaking
Most organizations could not create new UANs as Aadhaar numbers failed to pass demographic test
US politician Mario Cuomo said “you campaign in poetry; you govern in prose”. This transition from poetry to prose is the challenge of good governance and the best way to achieve it seems to be improving the government’s ability to make data-driven policy decisions.
Our company—TeamLease—is one of the largest payers of provident fund in the country—but I’d like to make the case that the Employees’ Provident Fund Organisation’s (EPFO’s) recent initiative to publish payroll data is a wonderful gift to policymaking.
The noise to signal ratio around labour market data has been very high in India. The political debate has covered authenticity, whether new formal jobs are new jobs, and much else. But as American politician Daniel Moynihan said “You can have your own opinions but not your own facts”. All new formal jobs may not be new jobs but they are all new formal jobs. And given India’s battle is less about having a job (India has very few poor who are unemployed) but assuring youth a formal job with decent wages and human capital building, this important transformation needs to be duly measured, acknowledged and celebrated.
EPFO’s recent data has amazing insights. Maharashtra has had consistently the highest net growth month-on-month (20%) in subscribers across all age groups except below 18. Kerala had the highest relative growth among all states across all age groups. Overall north-eastern states have the least additions.
A look at the net payroll data between September 2017 and July 2018 makes an interesting revelation—there is a decline of 13% in new subscriber base. Before we jump to the obvious conclusion of job losses or slow down in jobs—I would like to draw attention to the fact that most organizations were unable to create new Universal Account Numbers (UANs) for new joinees as that employees’ Aadhaar numbers were not passing the demographic test (father’s name mismatch, date of birth mismatch, name spelling mismatch) that EPFO was doing on the UIDAI database.
The data also suggest an eight-fold increase of rejoiners (existing subscribers but whose remittances have been re-initiated through a different employer or even same but possibly after a gap) between September 2017 and July 2018. Besides the obvious increase in lateral shifts by those in the workforce, it also suggests that EPFO objective of ensuring single UAN numbers for all those in the workforce is finally falling into place and the earlier challenges of its implementation seem to be a thing of the past. The most encouraging trend is that 50% of the new subscribers are between 18 and 25 years of age. That’s where the criticism that all this data is mere rebadging of existing jobs misses the point to a large extent. The data suggests that there is an increase in the number of youth who are entering the workforce with a formal job or are getting a chance to move out of informality very early in their employment journey. Lastly, the sectoral trends clearly throw up facts on sectors and in which there is a positive trend (especially post-GST) and the sectors which are clear laggards (schools, trading, plastics).
Rituparna Chakraborty is co-founder and executive vice president, TeamLease Services and president of Indian Staffing Federation.