Economy added 16.9 lakh less jobs in FY21: SBI Research


Net job creation in the economy fell by 16.9 lakh in FY21 over the previous fiscal, shows an SBI Research analysis of EPFO payroll data. However, the FY21 numbers are better than the FY20 net job creation, which had declined by 28.9 lakh, further cementing the view that the economy is not creating new employment opportunities.

The latest EPFO data shows that net new EPF subscribers stood at 94.5 lakh in FY21, and NPS added 5.82 lakh, taking the cumulative net addition to 100.4 lakh, which is marginally down from 102.3 lakh in FY20.

However, according to Soumya Kanti Ghosh, SBI’s group chief economic adviser, “this does not represent the correct picture as the data include the number of exited members who re-joined and re-subscribed, and thus not fresh job creation.”


“An estimate of the actual net new payroll (first job) adjusted for re-joined/re-subscribed members and formalization (based on ECR data), shows the actual net new payroll is only 44 lakh is FY21, which is 16.9 lakh less than the net new payroll generated in FY20, when the new payroll declined by almost 28.9 lakh,” he said.

Ghosh also said most of the 44 lakh additions are low quality jobs.

The second job (or the exited members who re-joined and re-subscribed) rose by 17.9 lakh in FY21.


However, the number of new members who joined declined by 6.9 lakh in FY21 compared to an increase of 1.5 lakh in FY20. This indicates that lower number of people exited from job market in search for better/new jobs (which was obviously scarce during the pandemic-hit year).

“A breakup of the 95.4 lakhs job created by the EPFO payrolls, 41.2 lakh were through second jobs, 44 lakh through first jobs and 9.3 lakh were through formalization,” he said.

Ghosh added that the official numbers did not capture the 16.9 lakh decline in first-time jobs in FY21, though the number of second time jobs or those members who rejoined the payroll rose by 17.9 lakh.


Even the rate of formalisation declined by 1.2 lakh, reflecting the disruptions in MSME sector.

“Cumulatively, total payroll generation of EPFO and NPS was almost 19 lakh less than the previous fiscal,” he says, adding in the private sector, most job losses were in smaller companies.

The ratio of women enrolment to total enrolment in the EPFO data was 23 per cent in FY20 and has not changed significantly in FY21.


According to him, the problem with the EPFO/NPS data is that it does not exclude the the number of retirees.

The latest World Bank data shows a deep compression in the labour force from 495 million in 2019 to 472 million in 2020, primarily due to the first wave of the pandemic. As per CMIE data, in April 2021 alone the economy shed as many as 75 lakh jobs in the second wave of the pandemic.

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