Payroll Reporting in India: An Employment Perspective

The National Statistical Office(NSO), Ministry of Statistics and Programme Implementation has released the press note on Employment Outlook of the country covering the period September, 2017 to June, 2021 based on the administrative records available with selected government agencies to assess the progress in certain dimensions.

Payroll Reporting in India: An Employment Perspective – June, 2021

1. Since April, 2018 this Ministry has been bringing out the employment related statistics in the formal
sector covering the period September 2017 onwards, using information on the number of subscribers who have
subscribed under three major schemes, namely the Employees’ Provident Fund (EPF) Scheme, the Employees’
State Insurance (ESI) Scheme and the National Pension Scheme (NPS).

2. As mentioned in the earlier series, since the numbers of subscribers are from various sources, there are
elements of overlap and the estimates are not additive. Detailed information is separately published on the
respective organizational websites for the period September, 2017 to June, 2021. The information is based on
the number of subscribers, and the tables reflect a dynamic status for five sets of periods – (a) September 2017
– March 2018, (b) April 2018 – March 2019, (c) April 2019 – March 2020, (d) April 2020 – March 2021 and (e)
monthly data from April 2021 onwards. The data in Section 2.1 includes information gender-wise, on the
number of new members who have started subscribing to EPF, the number of members that have ceased their
subscription and the number of members who restarted contribution, having ceased subscription in the past.
The data in Section 2.2 includes information gender-wise, in respect of ESI, on the number of existing
employees who paid contribution and the number of newly registered employees who are paying contribution
during the period. The data in Section 2.3 includes information gender-wise, in respect of NPS, on the existing
subscribers and new subscribers contributing during the period.

Sources of data

1. The Employees’ Provident Fund (EPF) is a mandatory savings scheme under the Employees’ Provident
Funds and Miscellaneous Provisions Act, 1952. It is managed under the aegis of Employees’ Provident
Fund Organization (EPFO). It covers every establishment in which 20 or more persons are employed
(and certain other establishments which may be notified by the Central Government even if they
employ less than 20 persons each), subject to certain conditions and exemptions as provided for in the
Act. The pay ceiling is Rs.15000/- 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 the formal sector. The data on subscribers-new
members, exited members and those subscribers that re-started their subscription is sourced from
EPFO. More details are available at https://www.epfindia.gov.in.

2. The Employees’ State Insurance Act, 1948 is applicable to non-seasonal, manufacturing establishments
(other than a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a railway running
shed) employing 10 or more workers. For health and medical institutions, the threshold limit is 20 or
more workers. ESI Scheme for India is an integrated social security scheme tailored to provide socioeconomic protection to the workers in the organized sector and their dependents, in contingencies,
such as Sickness, Maternity and Death or Disablement due to an employment injury or occupational
hazard. The wage ceiling is Rs.21000/- per month. Subscribers are termed as Insured Persons (IP) and a
new IP number can also arise due to change in employment. Employees may cease to pay contribution
due to wage exceeding the statutory ceiling of Rs.21000/- per month or owing to resignation, death,
retirement or dismissal. The number of subscribers of this scheme also gives an idea of the level of
employment in the formal sector. Data is sourced from Employees’ State Insurance Corporation (ESIC)
and the information may have an element of duplication with EPF data and is thus not additive. More
details are available at https://www.esic.nic.in.

3. The Pension Fund Regulatory and Development Authority (PFRDA)’s National Pension Scheme (NPS) is
an easily accessible, low cost, tax-efficient, flexible and portable retirement account. Under the NPS
schemes for the Govt. Sector, the individual contributes to his retirement account and also his
employer will co-contribute for the social security/welfare of the individual. NPS is designed on defined
contribution basis wherein the subscriber contributes to his account, and the accumulated wealth
depends on the contributions made and the income generated from investment of such wealth. From
1st January 2004, the Central and the State Governments have adopted this scheme for new employees
except for armed forces. Most of the State Governments also adopted NPS subsequent to adoption of
NPS by Central Government. NPS was extended to Corporate Sector from 2009 onwards and it provides
platform for Corporates to make co-contribution in NPS accounts of their subscribers or facilitate them
to make their own contributions for their NPS accounts. There are three variations of contributions i.e.
only from employer, only from employee and contributions from both employer and employee. More
details are available at https://www.pfrda.org.in .


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