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Payroll Reporting In India – A Formal Employment Perspective

May 02, 2018: Ministry of Statistics & Programme Implementation (Central Statistics Office) has released "Payroll Reporting in India – A Formal Employment Perspective", which is reproduced hereunder:-

1. Measurement of job creation, employment and unemployment are usually done through statistical estimates from Household surveys, Enterprise/Establishment surveys, Administrative data and Data from government schemes. The Government of India also appointed a Task Force on Improving Employment Data under the Chairpersonship of Vice Chairperson, NITI Aayog, which gave its recommendations in August, 2017.

In pursuance to the recommendations of the Task Force, the Government has started an initiative to report the progress made in formal employment using measurable data from administrative records. This report presents the number of new subscribers who have availed benefits under three major schemes, namely, the Employees’ Provident Fund, Employees’ State Insurance Scheme and the National Pension Scheme.

2. This is the first in the series of employment related statistics, for selected areas, that the Ministry is intending to bring out on a regular basis. As the levels of employment are from various sources, there are elements of overlap and the estimates are not additive. Detailed information is separately published on the respective organisational websites for the period September, 2017 till February, 2018.

2.1 Employees’ Provident Funds Scheme: September, 2017 to February, 2018
Employees Provident Funds Scheme

Note: (1) Source: EPFO
(2) EPF is applicable to establishments having more than 20 workers (see Endnote 1)
(3) For more details, please visit website of EPFO.

2.2 Employees’ State Insurance Scheme (ESIC): September, 2017 to February, 2018
Employees State Insurance Scheme (ESIC)

Note: (1) Source: ESIC
(2) ESIC is applicable to establishments having more than 10 workers (see Endnote 2)
(3) Subscribers in ESIC are termed as Insured Persons (IP)
(4) For more details, please visit website of ESIC.

2.3 National Pension Scheme (NPS): September, 2017 to February, 2018
National Pension Scheme (NPS)

Note: (1) Source: PFRDA
(2) NPS is applicable to Central and State Government employees and private corporate sector (see Endnote 3)
(3) For more details, please visit website of PFRDA.

The estimated total number of new NPS subscribers during the period September, 2017 to February, 2018 is 4,21,665 persons.

3. The present report gives different perspectives on the levels of employment in the formal sector and not at an overall level. The Ministry welcomes suggestions for improvement in content, coverage and presentation.

Endnote: Coverage and Sources of data

1. The Employees Provident Fund Scheme (EPF) is the main scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is managed under the aegis of Employees' Provident Fund Organisation (EPFO). It covers every establishment in which 20 or more persons are employed and certain organisations are covered, subject to certain conditions and exemptions even if they employ less than 20 persons each. It is a mandatory savings scheme. The pay limit is Rs 15,000 per month. Persons drawing pay above Rs 15,000 are exempted or can be enrolled with some permission or on voluntary basis. The number of members subscribing to this scheme gives an idea of the level of employment in formal sector. The data on net subscribers is sourced from EPFO. More details are available at EPFO official website.

2. The Employment State Insurance Act, 1948 is applicable to establishments employing 10 or more workers. For health and medical institutions, the threshold limit is more than 20 workers. ESI Scheme for India is an integrated social security scheme tailored to provide Social Production to workers and their dependents, in the organised sector, in contingencies, such as Sickness, Maternity and Death or Disablement due to an employment injury or Occupational hazard. The wage ceiling is Rs 21,000 per month. The number of subscribers of this scheme also gives an idea of the level of employment in the formal sector. Beneficiaries are termed as Insured Persons and a new IP number can also arise due to change in employment. Employees who have ceased to pay contribution may be due to wage exceeding the statutory ceiling of Rs.21,000/- per month or due to resignation, death, retirement or dismissal. Data is sourced from Employment State Insurance Corporation (ESIC) and the information will have an element of duplication with EPF data and thus not additive. More details are available at ESIC official website.

3. The Pension Fund Regulatory and Development Authority (PRFRDA)’s National Pension scheme (NPS) is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account and also his employer can also co-contribute for the social security/welfare of the individual. NPS is designed on defined contribution basis wherein the subscriber contributes to his account, there is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth. Any citizen of India, whether resident or non-resident, individuals who are aged between 18 – 60 years as on the date of submission of his/her application. From 1st January 2004 the central and state governments have adopted this scheme for new employees except armed forces. This was extended to other establishments from 2009 onwards. More details are available at PRFRDA official website.

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